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Seoul, South Korea – North Korea is amenable to returning to international nuclear talks if the U.S. shows a willingness to resolve a dispute over the North’s alleged counterfeiting and money laundering, a South Korean lawmaker said Monday.

A Japanese legislator, meanwhile, said a top Chinese official who recently visited Pyongyang indicated China was not optimistic that North Korea will end its nuclear program or re-enter disarmament talks soon.

The developments demonstrate the uncertainty that has surrounded the nuclear standoff since the North’s test, which prompted the U.N. Security Council to impose sanctions against Pyongyang.

The head of the International Atomic Energy Agency, the U.N. nuclear watchdog, said the only real option for trying to curb North Korea’s nuclear weapons program is to talk to the regime.

“I don’t think sanctions work as a penalty,” Mohamed ElBaradei said after meeting with Rice in Washington. “Penalizing them is not the solution.”

In Seoul, Rep. Choi Sung of South Korea’s ruling Uri Party said he met with a “key North Korean official” in Beijing for four hours Sunday night. He said the official is well-versed in China- North Korea relations and inter- Korean ties but declined to identify him further.

After the meeting, Choi suggested the United States present the communist state with evidence of its alleged illicit financial activities so the North can punish those responsible.

He said the North Korean official said his country could then return to the talks “even if the issue is not completely resolved.”

The U.S. has said the financial restrictions are a separate issue from the nuclear standoff.

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