Report: US to impose sanctions on N. Korea

The United States has told South Korea it is preparing financial measures to punish North Korea for illicit weapons trade and counterfeit activities in the wake of its nuclear test last week, a newspaper report said on Friday.

Plans to hit the North's finances were discussed during a four-day visit to Seoul by US Deputy Secretary of State James Steinberg, the South Korean daily newspaper Chosun Ilbo said.

"The US delegation led by Steinberg explained when visiting President Lee Myung-bak and others Washington's own sanctions against the North centered around financial sanctions," the paper quoted a presidential Blue House official as saying.

Envoys from the five permanent UN Security Council members, Japan and non-council member South Korea met at the US mission to the United Nations in New York for several hours on Thursday to try to hammer out an agreement on a resolution that would expand sanctions against Pyongyang for its recent nuclear test.

North Korea has been ratcheting up regional tensions since it fired a long-range rocket over Japan in April, and on Thursday the hermit state put two female US journalists on trial accused of illegally entering its territory with "hostile intent."

Analysts say the pair, who were working for the Current TV network co-founded by former US Vice President Al Gore, have become bargaining chips in high-stakes negotiations with the United States, which has long sought to end the North's nuclear ambitions.

In 2005, the Bush administration imposed financial sanctions on the North over counterfeiting and drug-running. The move focused on a Macau bank and effectively shut off the North's access to the international financial system.