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Pyongyang has boycotted the nuclear talks since November 2005 to protest US sanctions imposed on a Macau bank accused of complicity in North Korean counterfeiting and money-laundering.

The United States and North Korea agreed to discuss the sanctions on the sidelines of the nuclear talks.

On Wednesday, US Deputy Treasury Secretary Robert Kimmitt said the sanctions talks would be a continuation of a New York briefing in March where American officials explained their case to North Korean officials.

The moves to blacklist Macau's Banco Delta Asia are "not sanctions, they are law-enforcement measures under the laws of the United States," Kimmitt said in Seoul after meeting with the South's nuclear envoy.

On Tuesday, the United States and South Korea also introduced a possible complication to the talks when they said they would refuse to treat the North as a nuclear state.

The US-Chinese talks this week are the third round in a "strategic dialogue" that began last December. The dialogue was agreed to in 2004 by President Hu Jintao and his US counterpart, George W. Bush.

Meanwhile, there were signs of disagreements between Seoul and Washington on how hard to press the North. South Korea has been struggling to balance its obligations to punish the North under the U.N. sanctions resolution with concerns that aggravating its volatile neighbor could destabilize the region.

In Tokyo, the US diplomats and Japanese officials agreed Monday to have all five of the North's negotiating partners meet during an Asia-Pacific economic conference this month in Vietnam.

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