Reuters
Saturday, December 23, 2006

North Korea warned the United States Saturday of retaliation if it stepped up sanctions against the regime over the deadlock in this week's nuclear disarmament talks, North and South Korean media said.
The North Korean army's chief of staff warned of tough action if the United States intensified financial sanctions imposed last year and aimed at curbing money laundering by the reclusive regime.

The six-party negotiations, which resumed Monday after a break of 13 months and Pyongyang's first ever atom bomb test in October, broke up on Friday, with envoys failing to persuade the state to give up its nuclear weapons.

The talks snagged on North Korea's refusal to launch substantive discussions until the United States lifted the sanctions which have left millions of dollars of North Korean funds in limbo in a Macau bank.

"Refusing to lift its sanctions at this week's meeting, the US insisted on our unilateral disarmament," North Korea's state television quoted Kim Young-chun as saying.

"If the US continues to beef up its sanctions, we will respond to such a move with tougher actions," Kim said, according to South Korea's Yonhap news agency.

Kim was speaking at a conference marking the 15th anniversary of North Korean leader Kim Jong-il's inauguration as commander of the army.

North Korea's official mouthpiece later said sanctions against the state were useless, and warned that the impoverished regime was not afraid of war.

"Sanctions and pressure will never work on the DPRK. If the hostile forces continue escalating sanctions and pressure against the DPRK, it will resolutely react to them with stronger countermeasures," KCNA news agency said in a lengthy statement also to mark the anniversary.

"The revolutionary armed forces of the DPRK want peace but they are not afraid of war. They will never allow anyone to infringe upon the sovereignty and dignity of their country even a bit," it said.

North Korea's chief negotiator Kim Kye-Gwan has blamed the failure of six-party talks on Washington's "hostile" policy toward Pyongyang, while chief US envoy Christopher Hill said Kim did not have the authority needed to negotiate.

The talks involve the two Koreas, China, Japan, Russia and the United States.