The six-party talks on the Korean Peninsular nuclear issue on Tuesday remained stalled as the Democratic People's Republic of Korea (DPRK) refused to attend the talks until its frozen funds at a Macao bank are fully released.

A delegation heads' meeting which was initially scheduled for Tuesday afternoon was canceled because of DPRK's boycott, Russian representative Alexander Losyukov said Tuesday evening at his hotel.

"The DPRK said its frozen funds in the Banco Delta Asia (BDA) have not been transferred into the Bank of China in Beijing so far," Losyukov said.

The stalemate over the frozen funds came a day after the U.S. Deputy Assistant Treasury Secretary Daniel Glaser said the United States and the DPRK had reached an understanding on the issue of frozen funds.

Glaser said the US$25 million frozen funds in BDA would be transfered to a DPRK account at the Bank of China.

"The consensus reached by relevant parties on properly resolving the issue of DPRK's bank account at BDA is conducive to promoting the six-party talks process," Chinese Foreign Ministry spokesman Liu Jianchao told the regular briefing Tuesday afternoon.

Liu said the ongoing six-party talks had made "a good start" on Monday and created favorable conditions for further progress on implementing further steps in the six-party talks.

The current six-party talks, which involved China, the DPRK, the United States, the Republic of Korea (ROK), Japan and Russia, are aimed at discussing specific steps in the initial phase of the Feb. 13 deal, in which the DPRK agreed to shut down the Yongbyon nuclear facility in return for energy aid.

Chief negotiators of the DPRK and the United States on Tuesday held their first direct talks since the current round of the talks began on Monday.

Top U.S. negotiator Christopher Hill said late Tuesday he held bilateral talks with the DPRK counterpart Kim Kye-Gwan for about an hour to discuss "a list of issues".

Kim and Hill exchanged views on solving the issue of the DPRK-related frozen fund, a ROK official said on Tuesday evening.

The ROK official, asked to be unnamed, said the issue of the DPRK-related frozen fund could be fully solved as quickly as Tuesday night or early Wednesday morning.

ROK's senior diplomat Lim Sung Nam confirmed Tuesday night that the issue of frozen funds could end up with satisfaction though the process is somewhat complex.

"In conclusion, there was no progress today (Tuesday)," top Japanese negotiator Kenichiro Sasae said Tuesday afternoon.

Hill hoped the talks would explore "what's the meaning of the disablement, how to disable and what to disable."

Hill said he looked forward to a plenary meeting on Wednesday.

Top Chinese envoy Wu Dawei said on Monday that the current talks would run through Wednesday.

(Xinhua News Agency March 21, 2007)