U.S. Secretary of State Condoleezza Rice Thursday rejected linkage between talks on North Korea's nuclear program and U.S. penalties on Pyongyang for illicit financial activity. North Korean efforts to connect the two are said to have stalled the latest round of six-party nuclear talks in Beijing. VOA's David Gollust reports from the State Department.

Condoleezza Rice

Secretary Rice says the nuclear talks and the financial penalties are separate issues and that negotiators in Beijing should not be diverted from the goal of achieving a nuclear free Korean peninsula.

Late last year, the U.S. Treasury Department imposed sanctions against a Chinese bank in Macao, Banco Delta Asia, it said was being used as a hub for illicit North Korean activity, including the passing of counterfeit U.S. currency.

Although North Korea had agreed in principle in September of last year to give up its nuclear program in exchange for aid and security guarantees, it refused to return to the nuclear talks after last November because of the sanctions.

The six-party talks reconvened earlier this week, but reports from Beijing Thursday said they have stalled, with Pyongyang refusing to discuss disarmament until the financial issues were resolved.

Secretary of State Condoleezza Rice (r) and Canada's Foreign Minister Peter MacKay

In a joint press appearance here with Canadian Foreign Minister Peter MacKay, Secretary Rice said the United States had made good on a promise to set up a working group within the six-party talks to deal with the financial issue, and that the matter should not further impede the nuclear talks.

"Diplomacy sometimes takes time, but we should not be diverted somehow by an issue that is clearly in another lane, and is clearly being dealt with in a way that the North Koreans themselves asked that it be dealt with," said Condoleezza Rice. "We cannot be diverted from what we need to do in the six-party talks, which is to have the denuclearization of the Korean Peninsula."

Rice said the working group on Banco Delta Asia met twice this week in the Chinese capital and is likely to convene again in New York next month, and that this is the appropriate track for resolving the financial issues.

Earlier this week in Beijing, Assistant Secretary of State for East Asian Affairs Christopher Hill hinted at progress in efforts to implement the September 2005 nuclear framework agreement.

But Thursday the U.S. delegate expressed frustration with Pyongyang, saying he was there not to talk about financial issues but getting North Korea out of the weapons of mass destruction business.

Hill said he expected more meetings Friday but that he then planned to leave and be back in Washington in time to celebrate the Christmas holiday.