SEOUL/BEIJING - North Korea is not eager to return to six-party denuclearization talks but has not rejected the idea, a United Nations envoy said on Friday as fresh diplomatic activity raised hopes for progress on the issue.

North Korea's chief nuclear envoy, Kim Kye-gwan, who is now in China, will make a rare visit to the United States next month, South Korea's Yonhap news agency said earlier in the day, indicating the long-stalled talks on ending Pyongyang's atomic ambitions might be back on track.

U.N. sanctions and a botched currency move that nearly halted commerce late last year have increased pressure on the destitute North to return to talks, to win aid to prop up its wobbly economy by reducing its security threat.

Kim's visit to China coincided with an unusually busy week of diplomatic activity for the reclusive North that included high-profile visits by envoys from China and the United Nations, and leader Kim Jong-il reiterating he wanted a peninsula free of nuclear weapons.

Their attitude right now is, certainly they're not happy with sanctions, Lynn Pascoe, U.N. Under-Secretary General for Political Affairs, told reporters in Beijing.

They're certainly not eager, not ruling out, but not eager to return to six-party talks.

USEFUL MEETINGS

Pascoe met with North Korea's president, foreign minister and vice foreign minister for discussions he said were quite useful and friendly but frank, covering a wide range of issues. He dined with Chinese officials on Friday, and will travel to Seoul and Tokyo on his way to New York.

North Korea expressed interest in improving relations with its neighbors, particularly South Korea, he said, but did not offer any concrete strategy to do so.

He did not give specific details of any messages he carried.

Pascoe said North Korea was only getting about a quarter of the food and other aid it needed, and could see even that shrink. He cited donor fatigue as one of the reasons for the shortfall.

I was alarmed to learn that funding shortfalls from the international community is placing some of these programs in jeopardy, he said, adding that North Korea and its citizens welcomed the aid.

Kids are not being given the nutrition requirements that they need, there is going to be hospital support that declines or goes away. These are all basic critical human needs... We need the program to be going up, not down, to help the kids. That's all.

Meanwhile in Beijing, Kim Kye-gwan planned to meet China's top envoy to the nuclear talks on Friday and return home the next day with a message from the North's biggest benefactor, a diplomatic source told South Korea's Yonhap agency.

A U.S. embassy spokeswoman in Beijing would not comment on whether Kim had applied for a visa to the U.S.

THE NORTH AND ITS DISARMAMENT PLEDGES

Kim's last trip to the United States was about three years ago and led a few months later to North Korea taking its first steps to disable the Soviet-era Yongbyon nuclear plant that produces bomb-grade plutonium.

North Korea later backed away from its disarmament pledges, expelled international inspectors, and produced a fresh batch of plutonium at Yongbyon which experts said could give it enough fissile material for one nuclear bomb.

If Kim is going to Washington, he will be taking something in hand and we will likely see significant results related to the six-way talks, said Kim Yong-hyun, a professor of North Korean studies at Dongguk University.

North Korea has previously put conditions on its return to the talks, including ending U.N. sanctions and also having discussions with the United States on a peace treaty to replace the ceasefire that ended the 1950-53 Korean War.

Resuming the talks could ease concerns among market players about investing in the heavily armed peninsula, but was unlikely to cause any major movements in markets, analysts have said.

Investors, grown used to the mercurial ways of the North, expect no change in the Korea discount, where equities, bonds and other assets are priced lower than regional peers on concerns that include risks from North Korea.

(Additional reporting by Jack Kim and Christine Kim in Seoul; Editing by Jerry Norton)

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