KEY POINTS:
BEIJING - With guarded optimism in the air, six-way talks on North Korea's nuclear arms program will consider a draft agreement on Friday that promises rare but limited steps towards curbing Pyongyang's atomic ambitions.
Envoys to the talks in China's capital saw hope that North Korea would accept initial measures to rein in its nuclear activities in return for aid and security assurances broadly spelled out in a September 2005 deal.
China was due to circulate the draft late on Thursday or early on Friday, the chief US negotiator, Assistant Secretary of State Christopher Hill, told reporters. Russia's RIA news agency said it was already in negotiators' hands.
"We hope we can achieve some kind of joint statement here," Hill said. "The delegations are coalescing around some of the themes that we believe should be the basis for a first step in implementing the September agreement."
Even if agreement is reached, it will be just one part of a complicated puzzle involving financial disagreements, North Korea's energy and economic needs, and distrust between Pyongyang and Washington over their ultimate intentions.
The draft proposes stopping work at North Korean nuclear sites within two months, including the plutonium-producing Yongbyon reactor, and supplying Pyongyang with other energy sources, RIA said.
Since 2003, the talks have brought together host China, South and North Korea, the United States, Japan and Russia in a stop-start effort to curtail Pyongyang's plans, which took a dramatic step with its test of a nuclear device in October.
Participants have dismissed hopes of an immediate settlement. But even limited agreement would ease tensions in volatile northeast Asia and be a diplomatic victory for the beleaguered Bush administration.
US Secretary of State Condoleezza Rice said a deal could be in sight.
"I am cautiously optimistic that we may be able to begin, again, to implement the joint statement of 2005," she told a congressional panel in Washington.
Earlier hopes have foundered over North Korea's distrust of Washington and, since late 2005, the North's objections to a US financial squeeze that has included a freeze on its assets at a bank in Macau.
Hill did not rule out a fruitless end to the current talks, but he said North Korea was finally considering specific steps towards curbing its nuclear activities.
"These would be set of actions, and not a set of pledges, but really a set of actions that would have to be taken in a finite amount of time," he said.
The Yongbyon plant, which produces plutonium that can be used in weapons, has been a focus of concern.
Japan's chief delegate, Kenichiro Sasae, told Thursday's meeting that North Korea must "halt and seal" its operations at Yongbyon and accept monitoring by the International Atomic Energy Agency, according to a draft of his speech.
North Korea remained silent after the first day of talks.
In December, Pyongyang's Kim Kye-kwan stymied hopes of a deal by focussing instead on the financial crackdown over what Washington says is clear evidence of North Korean counterfeiting of US cash and other misdeeds.
White House spokesman Tony Snow, asked about the potential for removing any of the financial sanctions without a full dismantling of the nuclear program, said it was "not wise to get ahead of yourself."
Kim told China's official Xinhua news agency before leaving Pyongyang that he did not "expect too much" from the talks and their fate lay in US hands.
"We are prepared to discuss the initial steps, but the judgement (for the talks) should be based on whether the United States will come forward and abandon its hostile policy against us and co-exist peacefully," Kim said on arrival in Beijing.
- REUTERS