Envoys to North Korea nuclear talks struggle to compromise over Chinese draft proposal

(AP) Negotiators at the North Korea nuclear talks haggled Friday over details of initial steps to disarm the communist country, but the main U.S. envoy said he was encouraged by agreements on broad principles.

Assistant Secretary of State Christopher Hill said the remaining issues focused on a single paragraph of a Chinese proposal for a set of reciprocal steps aimed at implementing a 2005 deal that calls for North Korea to disarm in exchange for security guarantees and aid.

Hill said the envoys were working to rewrite the text to address North Korea's concerns. He did not give any details.

"It's hard to think that these issues would hold it up, it's hard to think that they would be deal-breakers, but we have to see," Hill said. "I'm still cautiously optimistic."

"The sort of fundamental issues, I think we're OK on," he said.

The United States, China, Russia, Japan and South Korea want the North to take its first real steps toward abandoning its nuclear program since talks began in 2003. Negotiations have been plagued by deadlock and delays, during which North Korea conducted its first nuclear test in October.

The draft proposal would grant Pyongyang unspecified energy aid for shutting down its main nuclear facilities within two months, South Korea's Yonhap news agency reported. Officials declined to confirm details of the draft.

Hill said two key issues that have previously stalled the negotiations have not been problematic this time. They include U.S. restrictions on a bank for its alleged complicity in North Korea's alleged money laundering and counterfeiting, and demands that North Korea be given a nuclear reactor for generating electricity.

Japan's main negotiator, however, warned this round of talks could end without any result. "We will continue with the talks, but at this point in time I don't feel there is a prospect of reaching an agreement," Kenichiro Sasae said, without elaborating.

Earlier Friday, Hill and his North Korean counterpart, Vice Foreign Minister Kim Kye Gwan, met for two hours. Kim said after that the meeting led to agreement on some unspecified issues, but there were still others to overcome.

"We are going to make more efforts to resolve them," Kim said.

A pro-Pyongyang newspaper in Japan connected to the regime said the North wants the U.S. first to show that it has permanently ceased its "hostile" policy toward Pyongyang.

"As conditions mature, (North Korea) can halt the operation of the Yongbyon nuclear facilities," the Choson Sinbo said, referring to the site of the North's main nuclear complex north of Pyongyang.

"The (North)'s position is that it can take corresponding measures when the U.S. takes steps to show that it irreversibly gave up its hostile policy," the newspaper said on its Web site, citing a "diplomatic source well versed in" the negotiations.

After decades of developing nuclear weapons, the North is believed to be reluctant to give up its bombs early in the disarmament process without having ironclad assurances that Washington will not seek to overthrow Kim Jong Il's regime. That would likely mean waiting for the restoration of full diplomatic relations between the countries, along with a final peace deal to replace the cease-fire that ended the Korean war in 1953.

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Associated Press reporters Jae-soon Chang and Hiroko Tabuchi contributed to this report.