BEIJING, March 10: North Korea will retaliate if the United States fails to keep its promise to lift financial sanctions imposed on the communist regime, Pyongyang's chief nuclear negotiator said here on Saturday.

The warning from Kim Kye-Kwan came after he held landmark negotiations in the US with his US counterpart Christopher Hill earlier this week.

Washington agreed to begin talks that would lead to the lifting of sanctions that resulted in a freeze on $24m in North Korean funds at the Macau bank Banco Delta Asia as part of a February agreement on ending Pyongyang's nuclear weapons drive.

"The US has promised the North it will scrap financial sanctions on the Banco Delta Asia (BDA) and the North is keeping a close eye on the promise," Kim Kye-Gwan was quoted as saying by Yonhap news agency at Beijing international airport before boarding a flight to Pyongyang.

He said if the US failed to solve the issue completely, the North would have to take action against it.

Washington had said BDA was laundering North Korean-made counterfeit US $100 bills.

The accord at six-party talks among China, Japan, North Korea, South Korea, Russia and the US came four months after Pyongyang carried out its first nuclear test.Kim and Hill discussed normalisation of relations on Monday and Tuesday in New York and will meet again here at six-nation talks expected to convene on March 19.—AFP