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North Korea later cited that move as the reason for its refusal to participate in nuclear talks for more than 13 months, but agreed to return when the US said it would discuss the financial restrictions.

When the nuclear talks opened Monday, the North demanded anew that the bank measures be lifted as a precondition for discussing disarmament.

US and North Korean financial experts were meeting Wednesday for a second time separately from the arms talks to discuss the financial sanctions issue. The two sides met for three hours Tuesday, but a US Treasury Department official said there was no quick fix.

"If this is going to be a very productive dialogue, then this is going to have to be a long-term process that really is working to address the underlying concerns that we have been articulating and that are the underlying concerns of the international financial community," Daniel Glaser, deputy assistant secretary for terrorist financing and financial crimes said Wednesday.

Chinese Foreign Ministry spokesman Qin Gang said at a news briefing Tuesday that China's government hopes the two sides can "solve the issue properly."

Hill praised China's renewed will to persuade North Korea to disarm since the nuclear test and said Beijing had a "very special role to play."

"To solve the problem of the (North Korea's) nuclear ambitions is going to require a great effort by China," he said. "We cannot do it by ourselves, we need to work in this multilateral framework."

China backed a UN Security Council resolution sanctioning North Korea after the atomic test, but Beijing has refrained from tough moves to cut off the key economic relations.

Hill said the talks were of critical importance for North Korea.

"I really do believe that at the end of this six-party process, however it turns out, it will help determine that country's future in a way I think is fairly profound," he said.

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