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Negotiators from the United States and North Korea continued their meeting in Berlin on Wednesday to discuss how to make "real progress" when the six-party talks resume, the United States State Department said on Wednesday.

US envoy Christopher Hill has described his talks with North Korea's Kim Kye-Gwan in Berlin as useful and productive, said State Department deputy spokesman Tom Casey.

Officials said Washington's willingness to talk directly with Pyongyang as North Korea has long demanded suggested a readiness to compromise on areas such as the desired crackdown on the East Asian country's finances, despite its defiant nuclear test last October.

Several officials in Washington said they believed the Bush administration was inclined to find a solution to the dispute over North Korea's accounts at a Macao bank, which it has called "a willing pawn" in Pyongyang's illicit financial deals.

Tuesday's bilateral talks between Hill and Kim were the first outside the framework of six-party nuclear talks in Beijing since their beginning in 2003.

South Korea Foreign Minister Song Min-soon said the meeting should bring the two sides a step closer to implementing a key agreement on ending North Korean nuclear arms program which was struck in September 2005.

"The work now being done is to bring tangible results when the six-party talks take place next time", Song said. "There will have to be a good platform laid at this meeting for reaching an agreement on early steps on implementing the September 19 joint statement."

In that statement, hammered out in talks with South Korea, the United States, Japan, Russia and China, Pyongyang agreed to give up its nuclear arms in exchange for economic aid and security guarantees.

The talks later became mired over Pyongyang's complaint that a US attack on its financial activities proved Washington's continuing hostility to its leaders.

The United States has since agreed to meet North Korea officials separately on the financial crackdown and is looking at the possibility of releasing some of the North Korea's funds it froze, US officials said.

The separate meeting of US and North Korean financial officials are set to resume next week in New York.

"They are taking another look at this issue", said one US official. "There is active discussion within the administration on whether to make concessions and if so, how far, how fast and under what conditions."

US authorities are scrutinizing a number of North Korean accounts at the Macao bank to see if funds from the North's legitimate business can be separated from illicit cash flow, one of the officials said on the condition of anonymity.

(Xinhua News Agency, China Daily via agencies January 18, 2007)