GENEVA - North Korea said on Tuesday the standoff over its nuclear programme should be settled through direct talks with the United States, but first Washington must drop what it called its hostile policies.

In a speech to the United Nations-backed Conference on Disarmament, North Korean diplomat Jon Yong Ryong rejected South Korea's appeal for it to resume six-party talks.

The nuclear issue on the Korean peninsula should be settled between the Democratic People's Republic of Korea and the United States from every aspect as it is a product of the hostile policy of the U.S. toward the DPRK, Jon told the Geneva forum.

It is a pipedream to expect that the DPRK will dismantle its nuclear programme without the U.S. dropping its hostile policy toward the DPRK, he added.

U.S. Secretary of State Hillary Clinton said last Friday she was encouraged by signs North Korea may be preparing to return to stalled talks on its nuclear programme.

The United States would keep working to pull North Korea back into the negotiations it abandoned a year ago, which increased uncertainty across the region, she said.

Two senior U.S. envoys on the North Korea issue wrapped up a tour to the region for talks with South Korea, Japan and China, which along with the United States are pushing to resume dialogue with Pyongyang.

Jon, first secretary at North Korea's diplomatic mission to the U.N. in Geneva, said North Korea was boosting its nuclear deterrent. This had helped preserve peace and stability in the divided Korean peninsula and in northeast Asia.

He rejected as provocation an appeal by South Korea's deputy foreign minister who urged Pyongyang to return to six-party talks, declaring a nuclear North Korea was unacceptable.
Cho Hyun, South Korea's deputy minister for multilateral and global affairs, said his government would pursue a two-track approach toward North Korea, combining dialogue and sanctions.

The Republic of Korea maintains the firm position that a nuclear North Korea will not be tolerated, he said in a speech.

North Korea and South Korea are both members of the 65-nation body.

Six-party talks are the most viable framework for resolving the North Korean nuclear issue, Cho said, adding: We urge North Korea to promptly return to the six-party talks and show a sincere attitude toward denuclearisation.

U.N. sanctions and a botched currency move that nearly halted commerce late last year have increased pressure on the destitute North.

(Editing by Jonathan Lynn and Janet Lawrence)