North Korea is threatening to boycott a resumption of nuclear disarmament talks unless the United States drops financial action it has taken against several North Korean companies. Washington says the companies are a front for illegal activities used to fund Pyongyang's weapons programs.

In a commentary published Tuesday by North Korea's official Rodong newspaper, Pyongyang said it would be "impossible to resume" six-party nuclear negotiations while "provocative" U.S. financial sanctions are in place.

The United States, Japan, Russia, China and South Korea have been trying to persuade North Korea to dismantle its nuclear facilities in exchange for financial and diplomatic incentives. Pyongyang agreed in principle to dismantlement at six-party talks in September. But the North Koreans then immediately began laying down new conditions.

The first was that the United States provide the North with a light water nuclear reactor for peaceful energy production.

The United States has replied that a light water reactor will not be discussed until North Korea complies with its dismantlement commitments, and the other parties to the talks have generally supported this position.

South Korea and China also oppose sanctions or strong diplomatic pressure against the North, but Washington took unilateral financial action against eight North Korean companies in October. It says the companies are engaged in illegal activities to finance Pyongyang's nuclear weapons programs.

Peter Beck, Northeast Asia Director for the International Crisis Group research organization, says the Bush administration's actions are likely to keep the situation tense in the short term.

"Since they are not going to get support of Beijing and Seoul for actual sanctions, they [U.S. officials] are going after North Korean companies and operations any way they can," said Mr. Beck. "So I think we're going to see further deterioration, at least for the time being, in relations between U.S and North Korea."

The United States has long accused the North Korean regime of engaging in currency counterfeiting, money laundering, the sale of missile technology and narcotics trafficking in order to support itself. North Korea denies taking part in those activities.

While the world waits to see if the six-party talks will resume as expected in January, a simmering dispute between Japan and its neighbors could complicate multinational cooperation on the nuclear issue.

China and South Korea, negotiating partners with Japan and the United States in the six-party talks, have been angered by Japanese Prime Minister Junichiro Koizumi's repeated visits to a controversial Tokyo war shrine. The shrine honors convicted war criminals along with other Japanese war dead.

China has said it will not participate in a customary meeting with Japan and South Korea next week on the sidelines of the summit of the Association of Southeast Asian Nations. South Korean President Roh Moo-hyun has also ruled out any visit to Tokyo in the near future.

In an attempt to cool the dispute, Japanese Foreign Minister Taro Aso has written a letter to his South Korean counterpart, assuring him that Japan takes South Korea's anger seriously.