North Korea committed to disarmament pact: IAEA

BEIJING (Reuters) - North Korea is committed to a disarmament pact reached in February but wants sanctions lifted first, the head of the U.N. nuclear watchdog said on Wednesday on his return from a trip he said had cleared the air.

International Atomic Energy Agency chief Mohamed ElBaradei said in Beijing that his visit, the IAEA's first to the reclusive communist state in more than four years, had opened the way to a normal relationship.

But he said North Korea wanted U.S. financial restrictions against it resolved before it would shut its Yongbyon nuclear reactor and readmit inspectors as agreed in a February 13 accord reached at six-party talks in Beijing.

"The DPRK mentioned that they are waiting for the lifting of sanctions with regard to the Macau bank before they implement the part of the agreement allowing the agency to monitor and verify the shutdown of the Yongbyon facility," ElBaradei told a news conference, referring to North Korea by its official name, the Democratic People's Republic of Korea.

Pyongyang stunned the world last year with its first nuclear test, drawing widespread condemnation and U.N. sanctions.

The February agreement was reached at negotiations in Beijing in which China, the United States, South Korea, Japan and Russia worked to convince the North to scrap its atomic program.

ElBaradei's visit was the agency's first since December 2002 when North Korea expelled inspectors as an earlier disarmament deal fell apart. It withdrew from the nuclear Non-Proliferation Treaty days later.

FINANCIAL RESTRICTIONS

The United States said that within 30 days of the February deal it would settle a dispute over financial restrictions stemming from North Korean bank accounts frozen in Macau that Washington says Pyongyang used to launder illegal earnings.

That deadline now looms and U.S. envoy Christopher Hill told reporters in Beijing on Wednesday: "The Macau issue will be resolved as we've promised."

ElBaradei said North Korea's seeing through the initial steps of the deal, in which it must shut Yongbyon in return for energy aid and security guarantees, hinged on Washington making good on that promise.

"Once that happens, they are looking to fully cooperate with us and implement the agreement in the timeframe mentioned."

Hill, referring to Yongbyon, told reporters: "My understanding is that it hasn't been completely shut down yet."

ElBaradei said he had met three officials during his short stay in North Korea, including the head of the North's atomic energy agency, but not its chief nuclear negotiator, Kim Kye-gwan.

Nonetheless, he said he was positive about the visit.

"The trip cleared the air. It created a positive environment for our future relationship," he said.

A Non-Aligned Movement diplomat said: "They are speaking to each other, so at least there is some progress."

Referring to ElBaradei not meeting North Korea's chief nuclear negotiator, the diplomat said: "We don't see this as a problem. The North Korean chief nuclear negotiator said he had another engagement which he had agreed to earlier.

"We need to give both sides more time to have more discussions -- this is such a complex issue that cannot be resolved in one or two days."

NO SIGNS

The IAEA inspectors will be key to verifying whether North Korea makes good on its pledge to shut down Yongbyon.

South Korean Foreign Minister Song Min-soon said earlier that North Korea had shown no signs of closing the reactor.

Earlier this week, a U.S. official said North Korea was preparing to shut down the Yongbyon complex, but other U.S. officials have been more guarded.

In addition to Hill, South Korean envoy Chun Yung-woo arrived in the Chinese capital for working-group meetings as the multilateral waltz heats up ahead of a new round of six-party talks opening on Monday.

Both envoys, along with China's Wu Dawei, were to take part in talks aimed at fleshing out parts of the pact and the three were expected to meet ElBaradei.

Western diplomats said they expected no immediate progress and warned that the process of North Korea establishing relations with the IAEA or bringing back inspectors would need time.

"North Korea wants to show that they are in the driving seat. They want to drive home the point that they are on eye level when it comes to these negotiations," one diplomat in Vienna said.

(Additional reporting by Jack Kim and Jon Herskovitz in Seoul, Carol Giacomo in Washington and Karin Strohecker in Vienna)