Mark Fitzpatrick, a non-proliferation expert at the International Institute for Strategic Studies in London and a former State Department official who worked on the North Korea issue, said the Berlin meeting seemed significant.
"They would not be holding a third day of talks if North Korea wasn't responding in a substantive way," he said. "The continuation is a sign of some real discussion taking place."
He added that the talks were a good sign and long overdue.
By Louis Charbonneau
BERLIN (Reuters) - The United States and North Korea held a second day of unprecedented talks on Wednesday, raising hopes of a breakthrough in efforts to curb the communist state's nuclear weapons program.
Envoys from the two sides, who met for six hours on Tuesday and another 1-1/2 hours on Wednesday, are likely to hold a third round of discussions in the German capital on Thursday, U.S. Assistant Secretary of State Christopher Hill said.
The bilateral talks were the first outside the framework of six-country negotiations in Beijing which began in 2003 to try to stop North Korea's nuclear weapons ambitions.
Officials said Washington's willingness to talk directly with Pyongyang -- as North Korea has long demanded -- suggests it may be ready to compromise over a crackdown on North Korea's finances, despite a nuclear test by Pyongyang last October.
Russia's new chief negotiator at the six-party talks put pressure on Washington to scrap its financial penalties.
"The United States should make some steps toward the (North) Koreans by lifting financial sanctions," Alexander Losyukov told RIA news agency.
Hill met his North Korean counterpart, Kim Kye-gwan, at the North Korean embassy in Berlin on Wednesday. He declined to comment when he left.
Earlier, Hill said he hoped the six-party talks would resume in January. But he indicated that Pyongyang had still not made a decision to abandon its nuclear arsenal.
"The North Koreans have to understand that they have come to a crossroads," Hill said in a speech organized by the American Academy in Berlin. "(They) have to decide if they want nuclear weapons or if they want a place in the international community."
REAL DISCUSSION
Mark Fitzpatrick, a non-proliferation expert at the International Institute for Strategic Studies in London and a former State Department official who worked on the North Korea issue, said the Berlin meeting seemed significant.
"They would not be holding a third day of talks if North Korea wasn't responding in a substantive way," he said.
"The continuation is a sign of some real discussion taking place."
He added that the talks were a good sign and long overdue.
Hill declined to give details on the substance of Tuesday's talks but described them as "useful discussions." He also played down suggestions the bilateral talks might strike a deal.
"It's very important that any negotiating or deal-making needs to be done in the six-party process," Hill said, adding he would brief U.S. Secretary of State Condoleezza Rice about his meetings.
Rice arrived in Berlin for a two-day visit during which she will meet German Chancellor Angela Merkel and Foreign Minister Frank-Walter Steinmeier.
Several officials in Washington said they believed the Bush administration was inclined to resolve the dispute over North Korea's accounts at a Macau bank, which it has called "a willing pawn" in Pyongyang's illicit financial deals.
South Korean Foreign Minister Song Min-soon said the meeting should bring the two sides closer to implementing an agreement on ending North Korea's nuclear arms program which was struck in September 2005.
"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," Song said.
In that statement, hammered out in talks with South Korea, the United States, Japan, Russia and China, Pyongyang agreed to trade its nuclear arms for economic aid and security guarantees.
The talks later bogged down over Pyongyang's complaint that a U.S. squeeze on its financial activities was proof Washington remained hostile to its leaders.
Washington has since agreed to meet North Korean officials separately on the financial crackdown and may agree to the release of some of the North's frozen funds, which are now controlled by Macau authorities, U.S. officials said.
U.S. and North Korean finance officials are due to resume their talks next week in either New York or Beijing, Hill said.
U.S. authorities are scrutinizing a number of North Korean accounts at the Macau 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.
Firms, among them British American Tobacco, have said some of the funds frozen at the Macau bank are legitimate. North Korea has said unfreezing the funds is a condition to serious talks on implementing the 2005 deal.
