SEOUL, South Korea - North Korea said Wednesday it would return to nuclear disarmament talks in an effort to get access to frozen overseas bank accounts, a vital source of hard currency for the nation.

The North's Foreign Ministry make only indirect mention of its headline-grabbing atomic test last month, saying in a statement that it hoped to resolve US financial restrictions by going back to six-nation arms talks that it has boycotted for a year.

North Korean soldiers observe the south side through binoculars at the truce village of Panmunjom in the demilitarized zone (DMZ) that separates the two Koreas since the Korean War, on Wednesday, November 1, 2006. North Korea affirmed Wednesday it would return to nuclear disarmament talks to seek a resolution of a US campaign aimed at choking the nation's access to foreign banks. [AP]

Confirming US and Chinese reports of the agreement Tuesday, the North's Foreign Ministry said Pyongyang decided to return to the arms talks "on the premise that the issue of lifting financial sanctions will be discussed and settled between the (North) and the US within the framework of the six-party talks."

Washington had banned transactions between American financial institutions and Banco Delta Asia SARL - a bank in the Chinese territory of Macau - saying it was being used by North Korea for money-laundering.

US officials also sought to rally other countries to prevent the North from doing business abroad, saying all transactions involving Pyongyang were suspected of being involved in counterfeiting and money laundering.

The Macau ban is believed to have blocked the North's access to some US$24 million (euro18.9 million), and is thought to have hit the country's leadership in particular, who indulge in luxury goods like cognac and fine wines while the vast majority of North Koreans live in poverty.

In Seoul, South Korean Vice Foreign Minister Yu Myung-hwan said Wednesday he expects leaders of the countries involved to discuss the issue when they gather in Vietnam for an Asia-Pacific summit in mid-November and that the six-party talks were expected to take place after that. He did not indicate when.

However, South Korea's Foreign Minister Ban Ki-moon was quoted as saying by Russia's ITAR-Tass news agency that the talks could resume as early as this month.

Ban, who will be the next UN secretary-general, also said sanctions against the North would remain in place until the six-nation talks make progress, and that Pyongyang must halt all nuclear testing activity and invite inspectors to examine its nuclear program, ITAR-Tass reported.

According to Interfax, Ban also said the international community should provide North Korea with security guarantees and economic aid.

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