Nuclear talks with North Korea make progress, U.S. says

SINGAPORE (Reuters) - Talks with North Korea's top nuclear envoy on Tuesday made progress towards resuming stalled negotiations over the North's nuclear program, U.S. Assistant Secretary of State Christopher Hill said.

"Depending on what we hear back from capitals by tomorrow, I think there will be some further announcements very soon," Hill told reporters after meeting North Korean Vice Foreign Minister Kim Kye-gwan in Singapore.

"We did as much as we could do ... We addressed all the issues we needed to address," Hill said.

Kim told reporters at a separate briefing that the differences in view between the two parties had "narrowed."

"I think our conversation was very good," said Kim, speaking outside the North Korean ambassador's residence.

South Korea's Yonhap news agency quoted Kim as also saying the discussions were "serious."

When asked if a deal was near on the declaration, he said: "There were discussions on the overall issues. Try to look at this with more time and patience."

Six-nation talks have been held up pending a full accounting of North Korea's nuclear activities, a declaration due at the end of last year.

"We need to get things finalized for phase two. If we can do that I think we would look forward to having (North Korea) make their report ... and I think the Chinese would want to call a six-party meeting as soon as it can be arranged," Hill said. China chairs the six-party talks.

In Washington, U.S. Secretary of State Condoleezza Rice was cautious, saying she had not had a full briefing from Hill.

"If there has been some progress, that's a good thing, but I think we will have to assess what it is we have -- what it is that is remaining to do," she told a news conference.

HEIGHTENED TENSION

Hill had told reporters before his meeting with Kim that he was not expecting to reach an agreement on a declaration at this meeting.

"I don't think we will have any agreement. We are not looking for an agreement. We are looking to have a consultation on some of the issues that have kept us apart. They know exactly what the issues are and that we don't want to meet them unless we could achieve something."

The meeting in Singapore came at a time of heightened tension on the heavily armed Korean peninsula in recent days after North Korea tested short-range missiles and made threats against South Korea.

Washington wants Pyongyang to give a complete accounting of its nuclear programs as called for in a landmark deal struck in the six-party talks among China, Japan, Russia, the two Koreas and the United States in February 2007.

The declaration is meant to answer U.S. suspicions of a secret program to enrich uranium for weapons and proliferating nuclear technology.

North Korea has said it had already made the declaration and the U.S. suspicions were "fictions."

Diplomatic sources in Tokyo told Reuters the United States and North Korea have been discussing a possible face-saving compromise under which Pyongyang would acknowledge the U.S. assertions in a document separate from its declaration.

"The proposal is face-saving to both sides," one source said. "It is particularly face-saving to North Korea because they don't have to directly admit that they had done something wrong."

Last month, a senior U.S. official said Washington had begun exploring whether Pyongyang might disclose any proliferation and uranium enrichment in a separate document.

If the North makes a declaration that satisfies Washington, it stands to be removed from a U.S. terrorism blacklist and be better able to tap into finance that could boost its economy.

Hill, who last met Kim about a month ago in Geneva, flies to Beijing early on Wednesday to brief South Korean, Japanese and Russian officials on the North Korean situation.

"I think we took the process beyond where we were in Geneva, and we both agreed that we will report back to our capitals and await further instructions," Hill said.

(Additional reporting by Jennifer Tan and Frances Yoon in Singapore, Jack Kim in Seoul, Teruaki Ueno in Tokyo; Arshad Mohammed in Washington; Writing by Bill Tarrant; Editing by Jerry Norton and Cynthia Osterman)