BEIJING - A US Treasury official in Beijing for negotiations with North Korea over its alleged illicit financial dealings said Tuesday he was "hopeful" of progress.

Deputy Assistant Treasury Secretary for Terrorist Financing and Financial Crimes Daniel Glaser speaks to reporters at Beijing's international airport, China, Sunday, Jan. 28, 2007. [AP]

Deputy Assistant Treasury Secretary Daniel Glaser was set to meet his North Korean counterparts later Tuesday to talk about US financial restrictions, which were imposed due to Pyongyang's alleged smuggling and counterfeiting and have stymied separate talks on scrapping its nuclear weapons program.

"We're prepared to go through these talks as long as it takes for us to get through our agenda," Glaser told reporters. "I'm hopeful we'll make progress."

The North Korean delegation told reporters when they arrived in Beijing that the talks will be held at the two embassies but did not make any other comments.

The financial negotiations are expected to clear the way for another round of six-nation nuclear disarmament talks.

Pyongyang has tied the financial restrictions and disarmament issues together since Washington took action against the Macau-based Banco Delta Asia in 2005, accusing it of laundering counterfeit money and abetting other unspecified criminal acts by North Korea.

The issue has caused other banks to steer clear of North Korean business for fear of losing access to the US market, thereby hampering the North's access to the international banking system.

The North says the restrictions are evidence of US hostility, and for a year Pyongyang boycotted the six-nation negotiations on dismantling its nuclear programs.

After North Korea tested a nuclear device in October, it agreed to return to the disarmament talks - as long as there were separate negotiations on the financial issues.

However, both the disarmament meetings and the financial discussions, held in Beijing in December, ended inconclusively. The six-party disarmament talks involve the two Koreas, the US, China, Japan and Russia.

US officials have indicated that North Korea is still demanding the financial issues be dealt with before progress can be made on the nuclear talks.

Pyongyang wants Washington to first end the financial isolation campaign, and to lift a freeze on $24 million in accounts at Banco Delta Asia.