SEOUL, South Korea - North Korea repeated its demand during talks with the United States this week that Washington lift financial restrictions on the country, a pro-Pyongyang newspaper reported Thursday.

US ambassador to South Korea Alexander Vershbow speaks in a seminar at the Yonsei University in Seoul, Tuesday, Jan. 30, 2007. Vershbow called for continued unity among the countries involved to convince the North to abandon its nuclear weapons. [AP]

Experts from Washington and Pyongyang met in Beijing on Tuesday and Wednesday to discuss the financial restrictions the United States imposed over the North Korea's alleged counterfeiting of US currency and money laundering. The meetings ended without a clear breakthrough.

North Korea, denying any wrongdoing, has claimed the restrictions were evidence of Washington's hostile attitude toward it and therefore it needs nuclear weapons to protect itself. It was in October that North Korea tested a nuclear bomb, sparking global condemnation and UN sanctions.

The financial row has been a key impediment to six-nation talks aimed at getting North Korea to give up its nuclear program, as Pyongyang has refused to address disarmament unless the financial restrictions are lifted.

North Korea repeated the demand in this week's talks, according to the Choson Sinbo, a Korean-language newspaper based in Japan that has links to the government in Pyongyang.

The North Korea is "demanding that the United States show an attitude of lifting the financial sanctions and not expanding them so as to create an atmosphere for entering into discussions on denuclearization commitments" in a 2005 accord, said the report posted on the newspaper's Web site.

The agreement - the only tangible outcome from the six-party talks - calls for North Korea to trade away its nuclear programs in exchange for security guarantees and aid. But it was never implemented because of the financial restrictions.

This week's talks preceded a new round of nuclear negotiations set to resume next week.

The top US delegate to the financial talks, Deputy Assistant Treasury Secretary Daniel Glaser, said the two days of talks had validated US suspicions of illegal financial activity by North Korea. He also suggested that the dispute could see an end.

"I think we are now in a position after a very lengthy investigation ... to start moving forward and trying to bring some resolution to this matter," Glaser said.

The US envoy did not say how the financial dispute would be settled. But there have been media reports that Washington was considering unfreezing some of North Korea's assets, worth US$24 million, seized at a Macau bank over the counterfeiting and money laundering concerns.

North Korea agreed to resume the nuclear talks, involving China, Japan, the two Koreas, Russia and the US, after the United States offered unspecified concessions during rare bilateral talks in Berlin last month.

That has raised optimism that the next session, set to begin on Feb. 8, could see real progress.

John Negroponte, nominated by President Bush to serve in the No. 2 post in the State Department, said in Washington on Tuesday that there were grounds for optimism due to continued international pressure on Pyongyang.

Wu Dawei, China's representative to the talks, also expressed hopes Wednesday that the six nations can reach an agreement after three or four days, but added that "this requires diligent efforts by all sides."