The Bush administration is also pushing for new formula of multilateral talks to coordinate sanctions to punish North Korea's nuclear and missile activities, instead of the long-stalled six-party nuclear talks, they said.

The U.S. move has embarrassed South Korean officials, who have long called for the United States to soften its stance against North Korea to seek a compromise to revive the six-way talks and ease military tensions on the Korean peninsula.

The top American nuclear envoy, Christopher Hill, informed South Korea of the U.S. decision during his visit to Seoul this week, the officials said. "The United States has made a set of proposals to induce North Korea into the six-way talks, but it has made no response," Hill was quoted as saying.

As late as last week, Hill proposed a meeting with his North Korean counterpart, Kim Kye Gwan, while he was in China. But Pyongyang refused the proposal, leaving Washington with little choice, according to the Seoul official.

Chun Yung-woo, South Korea's chief nuclear delegate, confirmed the U.S. proposal of a new formula of multilateral talks, which may include more players, and may exclude North Korea.

The United States hopes to use the forum to discuss sanctions on North Korea in accordance with a U.N. Security Council resolution adopted following the North's missile launches in July.

"The United States is expected to push for the meeting during the General Assembly of the United Nations later this month," Chun told reporters. "South Korea supports the idea as long as the framework of the six-way talks remains intact."

But Chun seemed frustrated that the North has given no immediate signs of rejoining the six-nation talks, which involve the United States, China, Russia, Japan and the two Koreas.

Pyongyang has boycotted the talks since November last year, citing U.S. sanctions imposed on a Macau-based bank accused of laundering money for North Korea.

The North has said it would not return to the bargaining table until the United States lifts the sanctions on the Banco Delta Asia, which is believed to have choked off Pyongyang's cash flow. But Washington rejected the demand, saying the financial issue must be separate from the nuclear talks.

The United States has also moved to freeze North Korean-held accounts in financial institutions overseas allegedly set up to fund the proliferation of weapons of mass destruction and other illicit activities.

Following the U.S. campaign, banks in Japan, Vietnam, Singapore and even the North's closest ally, China, have suspend their business transactions with the North, landing a major blow to the cash-strapped country.

In a move to further isolate the North financially, the United States is expected to announce a package of economic sanctions on the North after the planned summit between U.S. President George W. Bush and South Korean President Roh Moo-hyun on Sept. 14 in Washington, according to diplomatic sources.

Under the new package, the United States would re-impose the economic sanctions it lifted in 2000, including a travel ban, a broad trade ban and restrictions on investment and remittances.

In return for Pyongyang's self-imposed moratorium of missile tests in 1999, the Clinton administration in July 2000 allowed North Korea to export raw materials and goods to the United States and to open air and shipping routes between the two countries. However, after the North fired a set of missiles on July 5, violating its missile moratorium, the United States said it would restore the sanctions, according to sources.

Out of fear that tougher sanctions may trigger a "negative" response from the North, South Korean officials called for the United States to show greater flexibility and patience to resolve the nuclear standoff through the six-party forum.

"It is necessary that all countries concerned engage in various forms of dialogue in a flexible manner," Seoul's top security policymaker, Unification Minister Lee Jong-seok, told Hill on Monday.

"There should be no restrictions on the form of dialogue for the resumption of the six-way talks," he said, asking the United States to talk directly with the North to end the nuclear and missile crisis.

North Korea still insists on a face-to-face meeting with the United States to discuss the nuclear issue and financial sanctions.

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