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©AFP/Pool/File / Choi Jae-Ku

Pak Nam-Ki (centre), blamed for a bungled currency revaluation that triggered chaos in North Korea, has been shot dead

SEOUL (AFP) - North Korea has executed a top financial official blamed for a bungled currency revaluation that triggered chaos in the communist state, South Korean news reports said Thursday.

Pak Nam-Ki, who was earlier reported sacked as chief of the communist party's planning and finance department, was shot dead last week at a military range in Pyongyang, Yonhap news agency said.

Pak, 77, was charged with ruining the national economy as a "son of a big landowner", Yonhap said, quoting sources familiar with events in the North.

The news agency said many North Koreans believe he was made a scapegoat for the revaluation, which fuelled inflation and worsened serious food shortages.

Munhwa Ilbo newspaper carried a similar story. South Korea's unification ministry and the National Intelligence Service (NIS) could not confirm the reports.

"If the report is true, it proves the regime is now desperate to placate its people," said Dongguk University professor Kim Yong-Hyun.

"The regime appeared to have needed a scapegoat," he said, recalling the case of former agriculture ministry director Seo Gwan-Hee, who was publicly executed in 1997 after being held responsible for a famine.

The redenomination last November 30 forced people to swap old banknotes for new at a rate of 100 to one, but restricted the amount that could be exchanged.

It was widely seen as another attempt to crack down on the burgeoning free-market economy, but backfired disastrously according to numerous reports.

Savings were wiped out, prices soared and distribution networks were disrupted, aggravating hunger. NIS chief Won Sei-Hoon has been quoted as saying that the revaluation sparked riots which were later suppressed.

©AFP/File / Jung Yeon-Je

Combo photo shows the front (left) and back of North Korea's new currency launched in late November last year

The regime was forced to suspend its campaign to shut down private markets and the prime minister made a rare apology for the chaos.

Yonhap said the regime executed Pak as public anger had derailed a propaganda campaign to promote ailing leader Kim Jong-Il's youngest son Jong-Un as eventual successor.

"All the blame has been poured on Pak after the currency reform failure exacerbated public sentiment and had a bad effect" on the succession plan, one source was quoted as saying.

Kim, 68, suffered a stroke in August 2008. Some analysts say Pyongyang is waiting for the right opportunity to officially announce Jong-Un as successor.

Pak was one of Kim Jong-Il's close associates and frequently accompanied the leader on his trademark "field inspections" outside Pyongyang. He had not been mentioned by official media since early January.

©AFP/File / Tim Sloan

The official reason for Clinton's two-day visit is a meeting of the Middle East diplomatic quartet

MOSCOW (AFP) - US Secretary of State Hillary Clinton was in Russia Thursday for crucial talks on clinching a new nuclear disarmament treaty between the Cold War foes and smoothing tensions in the Middle East.

The 1991 Strategic Arms Reduction Treaty (START) expired in December and negotiators have failed to agree a successor -- to the embarrassment of two powers keen to promote a "reset" in sometimes troubled relations.

Clinton, who arrived in the early morning, will want to give a fresh push to the talks in her meetings with Russian counterpart Sergei Lavrov and President Dmitry Medvedev amid reports the process has been hit by policy disputes.

The official reason for Clinton's two-day visit is a meeting of the Middle East diplomatic quartet, a gathering that has grown in importance after Israel announced the construction of 1,600 new settler homes in annexed East Jerusalem.

Clinton and Lavrov will meet with the other representatives of the quartet, EU foreign policy chief Catherine Ashton and UN Secretary General Ban Ki-moon for dinner Thursday ahead of longer talks on Friday.

The Israeli announcement led the Palestinians to call for a halt to peace talks and precipitated the worst crisis in US-Israeli relations in years, with senior US officials warning the plans jeopardized the peace process.

©AFP / Hazem Bader

The official reason for Clinton's two-day visit is a meeting of the Middle East diplomatic quartet

Washington was also piqued by the announcement's timing -- coming as US Vice President Joe Biden visited the region -- and analysts said that the quartet could be expected to ramp up the pressure on Israel over the issue.

The meeting will "demonstrate international support" for indirect talks between Israel and the Palestinians, said US State Department spokesman Philip Crowley who is accompanying Clinton.

Related article:Obama says no crisis in US-Israel relations

Clinton will also be looking for clear signs Russia could be prepared to back tough sanctions on Iran if the stalemate continues over Tehran's nuclear programme.

"We feel a sense of urgency, it's time to demonstrate that there are consequences" to Tehran's behaviour, top State Department official William Burns told reporters accompanying Clinton.

Progress on a new nuclear treaty would provide Medvedev and US President Barack Obama with much-needed proof they have succeeded in improving relations after ties became mired in distrust under ex-president George W. Bush.

Obama and Medvedev had targeted a new agreement by the end of 2009 to drastically reduce nuclear weapons stockpiles but negotiations have lumbered on in Geneva amid reports of stark differences.

The New York Times reported last week that Obama was frustrated that Medvedev was linking the disarmament treaty with a dispute on US plans to install missile defence facilities in Eastern Europe.

©AFP/RIA/File / Astakhov Dmitry

Clinton will be looking for clear signs Russia could be prepared to back sanctions on Iran

But Lavrov said: "I have seen no sign of something not going well."

"All the 'i's have been dotted and all that remains is diplomatic-technical work... This will take some time but is purely technical," he said according to Russian news agencies.

The Russian media has reported that the two presidents would like to sign the final agreement in an Eastern European capital before the United States hosts a nuclear security summit from April 12-13.

But even then, the document would still await parliamentary ratification. The speaker of the Russian lower house of parliament said this week MPs would not approve the disarmament accord unless it made a link with missile defence.

Signed in 1991, START led to huge reductions in the US and Russian nuclear arsenals and imposed verification measures to build trust between the two former Cold War foes.

It is unclear if Clinton will meet Prime Minister Vladimir Putin, seen by most as still Russia's de-facto number one, having failed to see him during her last visit to Moscow in October.