Bush admits U.S. 'screwed up' over N. Korea banking impasse

(Kyodo) _ U.S. President George W. Bush admitted during his talks in April with Japanese Prime Minister Shinzo Abe that the U.S. government failed to fully read North Korean actions over the recent banking impasse, saying Washington "screwed it up," sources close to the Japan-U.S. relation said Thursday.

The remark may be seen as a rare acknowledgment by Bush that the United States erred in handling the stalemate over the transfer of North Korean funds that effectively has held up the six-nation nuclear talks since March, the sources told Kyodo News.

The financial dispute involves about $25 million in funds that had been frozen at Banco Delta Asia SARL in Macao accused by the United States of helping Pyongyang launder money and circulate counterfeit currency.

While the Macao monetary authorities have unblocked the funds, technical and legal issues have prevented the transfer of the money from the bank. North Korea has refused to implement tasks set out in a Feb. 13 six-nation denuclearization agreement until they receive the money.

The sources said Bush expressed strong displeasure at North Korea for insisting the funds be transferred via another bank with the aim of making a comeback to the international banking system, despite yielding by the United States such as letting the funds be released.

Abe, a known hard-liner in policies toward North Korea, and Bush met on April 27 at the Camp David presidential retreat just outside Washington.

Bush also signaled his sense of distrust of North Korean leader Kim Jong Il as North Korea has failed to take a step toward dismantlement of nuclear programs as was promised in the February accord with China, Japan, South Korea, Russia and the United States.

In the deal, North Korea agreed to shut down and seal its Yongbyon nuclear facility and invite International Atomic Energy Agency inspectors back into the country by April 14, in return for energy aid. The deadline passed without any of the commitments being implemented.

Meanwhile, in his talks with Bush, Abe, mindful of the North Korean abductions of Japanese nationals in the past, cited "voices of concern within Japan" about a shift in U.S. policy toward dialogue in handling North Korean affairs, expressing hope that Bush would not readily give in to North Korea, the sources said.

Bush encouraged Abe to express such a view to U.S. foreign affairs officials, according to the sources.......