Earlier, Christopher Hill, the chief US envoy to the nuclear talks, appeared pessimistic about the prospects for the negotiations and said no progress had been made.

"It's not an easy week to make progress," he said, but insisted: "We're not going to live with their nuclear weapons."

On Monday he said that the US was running out of patience with the North and may resort to imposing further sanctions.

'Hostile'

North Korea's envoy says progress depends
on sanctions being lifted [AFP]
North Korea’s envoy to the talks, Kim Kye-gwan, said the US financial sanctions are part of what he calls Washington’s "hostile policy" towards Pyongyang.

The North is demanding that all US and United Nations sanctions are lifted before talks on its nuclear weapons programme can progress.

As with the main six-nation talks, the meeting between US and North Korean financial officials took place behind closed doors.

China, which is hosting the dialogue, said it was optimistic that progress would be made.

"We wish to see them make positive achievements that we believe will facilitate the process of the [nuclear] talks,'' Qin Gang, China's foreign ministry spokesman, told reporters.

The six delegations attending the talks held about two hours of discussions on Tuesday, before breaking up into one-to-one sessions.

According to Chinese officials, the US and North Korean delegations also held their first one-to-one meeting, but no other details were given.

North Korea agreed to return to the six-nation talks under pressure from China after its first test of a nuclear weapon on October 9.