North Korea Reactor in Spotlight as IAEA Visits

The chief of the IAEA held first talks with N.Korea in more than 4 years, but the North's top nuclear negotiator said he was too busy.

Instead, International Atomic Energy Agency head Mohamed ElBaradei met another vice foreign minister and the head of the North's atomic energy agency, Ri Je-son, an IAEA spokeswoman said.

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

IAEA spokeswoman Melissa Fleming said a meeting with nuclear envoy Kim Kye-gwan was unlikely.

"We were told he is busy working on the upcoming six-party talks," Fleming told Reuters by telephone from Pyongyang, referring to a Beijing forum grouping the two Koreas, China, the United States, Japan and Russia.

Kim led his country's team when a six-way deal was reached in February in which North Korea agreed to shut the Yongbyon reactor at the heart of its nuclear programme in exchange for energy aid and security guarantees.

After meeting Ri, ElBaradei was also due to meet Kim Yong-dae, vice president of the Standing Committee of the Supreme People's Assembly, the North's rubber-stamp parliament.

Arriving in Beijing ahead of the new round of six-party talks opening on Monday, chief U.S. negotiator Christopher Hill said the lack of a meeting between Kim and ElBaradei was not necessarily a bad sign.

"I understood it was because Mr Kim Kye-gwan was busy with the six parties and I think Mr ElBaradei had a lot of technical meetings. So we'll know better when we talk to Mr ElBaradei," Hill told reporters.

He said he expected to meet ElBaradei on Thursday.

SHUTTING YONGBYON

Under the terms of the February agreement, the Yongbyon reactor, which makes plutonium that can be used in nuclear weapons, must be shut by mid-April in return for an initial heavy fuel oil shipment.

But South Korean Foreign Minister Song Min-soon said North Korea had shown no signs of closing the reactor. North Korea tested its first nuclear device last October, drawing widespread condemnation and U.N. sanctions.

"There is no indication of a change in the operational condition of Yongbyon," Song told a news conference in Seoul.

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.

The IAEA, which is trying to iron out the details of a return of its inspectors to North Korea, will be key to verifying whether the reclusive state makes good on its pledge.

China was again at the centre of the multilateral waltz as diplomats headed to Beijing to push forward the Feb. 13 deal.

In addition to Hill, South Korean envoy Chun Yung-woo arrived for working-group meetings. Both envoys, along with China's Wu Dawei, will take part in discussions aimed at fleshing out parts of the agreement dealing with disarmament and energy.

Washington also said that within 30 days of the February deal it would settle a dispute over North Korean bank accounts frozen in Macau, in southern China, that Washington says had been used to launder illegal earnings for Pyongyang.

North Korea has made lifting the restrictions a condition for renewed nuclear negotiations.

As part of the give-and-take to settle the dispute, the U.S. Treasury Department would bar U.S. banks from doing business with the Macau bank, which would allow Macau authorities to decide whether to release some of the frozen accounts, Washington officials told Reuters.

But releasing the funds could take weeks and the U.S. restrictions will continue to hinder the North's access to the international financial system, potentially irritating Pyongayng and complicating denuclearisation efforts. (Additional reporting by Lindsay Beck in Beijing, Jack Kim and Jon Herskovitz in Seoul, and Carol Giacomo in Washington)