N Korea refuses to shut down nuke facility

North Korea said on Saturday it would not shut its nuclear facility at Yongbyong until it gets back all its frozen money in a Macau bank.

Vice Foreign Minister Kim Kye Gwan, North Korea's chief nuclear negotiator, made the comments as he arrived in Beijing to attend six-nation nuclear dismantlement talks being hosted by China.

The talks are a follow-up on the February 13 breakthrough agreement in which North Korea agreed to dismantle its nuclear weapons programme in exchange for economic easements.

US financial sanctions against the Banco Delta Asia bank in Macau have been a key obstacle to progress in the six-party talks involving the two Koreas, the US, China, Japan and Russia.

The sanctions began in September 2005 when Washington accused the bank of handling illicit North Korean funds linked to money laundering, drug trafficking and counterfeit currency.

In a decision taken Wednesday, the US Treasury Department barred Banco Delta Asia from any direct or indirect access to the US financial system, saying the move would lead to the unfreezing of $25 million in North Korean accounts.

China condemned the US move, but US Assistant Secretary of State Christopher Hill, visiting Beijing ahead of Saturday, said he believed the move would "not pose a stumbling block" in negotiations with North Korea.

Under the Feb 13 agreement, North Korea has readmitted the International Atomic Energy Agency.

IAEA Director General Mohamed ElBaradei expressed hope Friday that the UN nuclear watchdog would be able to verify the shutdown of North Korea's nuclear programme before the April 13 deadline set by the UN Security Council.

But the precondition was that financial sanctions against North Korea were lifted.