US Secretary of State Hillary Clinton said Wednesday the United States is watching the "leadership process" in North Korea but hoped whoever is in power in Pyongyang will scrap nuclear weapons.

Speaking before US envoys tour Asia to discuss North Korea, Clinton said Washington is making clear to the North Koreans what they must do and what they would gain if they "seriously discuss denuclearization that is irreversible."

In April last year, North Korea bolted six-party disarmament talks -- involving the United States, China, Russia, South Korea and Japan -- following a UN reprimand over a long-range rocket test.

"We are in intense discussions about this with all the other six-party members, and we're watching the leadership process and don't have any idea yet how it's going to turn out," Clinton said at the Council on Foreign Relations.

"But the most important issue for us is trying to get our six-party friends, led by China, to work with us to try to convince who's ever in leadership in North Korea that their future would be far better served by denuclearizing," she said.

Reports from South Korea said North Korea has finished preparing for a key meeting of its ruling communist party, but there was still no indication when it would get under way.

The conference, the first of its type since 1966, is widely expected to confirm the youngest son of leader Kim Jong-Il as his eventual successor.

Meanwhile, Stephen Bosworth, the US envoy for North Korea and other US officials will travel to Seoul, Tokyo and Beijing next week to discuss North Korea.

earlier related report
South Korea announces sanctions against Iran
Seoul (AFP) Sept 9, 2010 - South Korea said it would penalise a key Iranian bank and put all financial transactions with Tehran under strict government supervision as part of sanctions over its nuclear programme.

Foreign ministry spokesman Kim Young-Sun said Wednesday the government would impose a "heavy penalty" on the Seoul branch of Bank Mellat, which allegedly facilitated hundreds of millions of dollars in transactions for Iranian nuclear, missile and defence entities.

Kim did not elaborate but Yonhap news agency said the bank would likely face a two-month suspension.

The decision came despite the fact that Iran is South Korea's biggest trading partner in the Middle East and the source of 10 percent of its oil imports.

The United States hailed the sanctions move as increasing pressure on Tehran to return to the negotiating table to address concerns about its nuclear aims.

Measures include blacklisting 24 individuals and 102 Iranian entities, including 14 other banks, as well as the strengthening of inspection of cargoes related to Iran.

There are also restrictions on new investment in Iran's oil and gas industry, but no ban on oil imports.

Transactions with Iranian entities which are not subject to sanctions will require approval from Seoul should the amount involved be more than 40,000 euros (51,056 dollars).

South Korea must walk a fine line between its trade relationship with Iran and its key ally the United States -- which has been leading the sanctions drive against Tehran over its suspected nuclear weapons programme.

The United States stations 28,500 troops in the South to protect it from North Korea. It strongly supported the South in the crisis following the sinking of one of Seoul's warships, allegedly by a North Korean submarine.

Washington has been canvassing international support for its drive to punish Iran after adopting its own sanctions to supplement United Nations measures.

Robert Einhorn, a US State Department official overseeing sanctions on North Korea and Iran, visited South Korea in early August to seek cooperation.

The Seoul sanctions send "a very strong signal to Iran that not only do we continue to have concerns about the nature of its nuclear activities, but we're taking aggressive action to further isolate Iran," US State Department spokesman Philip Crowley said.

Bank Mellat is one of Iran's biggest lenders and its Seoul branch is its only operation outside the Middle East and Europe.

A suspension of its business would likely affect more than 2,000 South Korean companies involved in trade with Iran, most of which is settled through the local branch office.

Iran's trade with South Korea surged more than 50 percent year-on-year to 7.4 billion dollars in the first seven months of this year, mainly due to increased Iranian oil exports.

Iran says that its nuclear programme is aimed at the peaceful generation of electricity. But the European Union, Canada, Australia and Japan have joined the United States in announcing punitive measures.