Banks around the world are limiting their dealings with North Korea, and the nation's leadership is complaining with a vigor unusual even for that government.

"It really struck a nerve," a senior administration official said with a smile. It also has given new energy to those in the administration who have argued for years that the six-nation nuclear disarmament talks were a waste of time and that direct action was the only tactic that might force North Korea to give up its nuclear weapons program.

Since the Treasury Department ordered American banks to cut off relations with the Macao bank, Banco Delta Asia, on Sept. 15, the administration has repeatedly insisted that the law enforcement action was unrelated to the nuclear negotiations. Only now are officials saying that further law enforcement actions are planned, and their use has coalesced into a strategy.

In interviews, several present and former administration officials said the Bush administration had concluded that the six-nation talks intended to persuade North Korea to give up its nuclear arms were unlikely to succeed unless they were accompanied by these direct, punitive actions.

The strategy now, said a senior official who watches the issue closely, is, "Squeeze them, but keep the negotiations going." The talks would then serve as little more than a vehicle for accepting North Korea's capitulation, if the pressure from other actions leaves it no choice.

Iran's budding nuclear program is capturing most of the government attention here, in Europe and in the Middle East. But senior officials across the government involved with North Korea policy pointedly note that North Korea is already believed to have enough plutonium to make 8 to 12 nuclear weapons, while Iran is probably years away from having the capability to make its first. On Wednesday, North Korea test fired two short-range missiles that could carry a warhead to South Korea.

Full story:http://www.nytimes.com/2006/03/10/politics/10korea.html?_r=1&th&emc=th&oref=slogin