The United States and North Korea have completed a second day of unprecedented talks, raising hopes of a breakthrough in efforts to curb the communist state's nuclear weapons programme.
Envoys from the two sides, who met for six hours yesterday and another hour and a half today, may hold a third round of discussions in Berlin tomorrow, US Assistant Secretary of State Christopher Hill said.
The bilateral talks were the first outside the framework of six-country negotiations in Beijing which began in 2003 to try to stop North Korea's nuclear weapons ambitions.
Officials said Washington's willingness to talk directly with Pyongyang suggests it may be ready to compromise over a crackdown on North Korea's finances, despite a nuclear test by Pyongyang last October.
Russia's new chief negotiator at the six-party talks put pressure on Washington to scrap its financial penalties.
"The United States should make some steps towards the (North) Koreans by lifting financial sanctions," Alexander Losyukov told RIA news agency.
Mr Hill met his North Korean counterpart, Kim Kye-gwan, at the North Korean embassy in Berlin, but declined to comment when he left.
Earlier, he said he hoped the six-party talks would resume in January. But he indicated that Pyongyang had still not made a decision to abandon its nuclear arsenal.
"The North Koreans have to understand that they have come to a crossroads," he said in a speech organised by the American Academy in Berlin. "(They) have to decide if they want nuclear weapons or if they want a place in the international community."
"It's very important that any negotiating or deal-making needs to be done in the six-party process," Mr Hill said, adding he would brief US Secretary of State Condoleezza Rice about his meetings.
Ms Rice has arrived in Berlin for a two-day visit during which she will meet German Chancellor Angela Merkel and Foreign Minister Frank-Walter Steinmeier.
Several officials in Washington said they believed the Bush administration was inclined to resolve the dispute over North Korea's accounts at a Macau bank, which it has called "a willing pawn" in Pyongyang's illicit financial deals.
South Korean Foreign Minister Song Min-soon said the meeting should bring the two sides closer to implementing an agreement on ending North Korea's nuclear arms programme which was struck in September 2005.
"There will have to be a good platform laid at this meeting for reaching an agreement on early steps on implementing the September 19th joint statement," Mr Song said.