The resolution of a North Korean banking issue, which is holding back a critical denuclearization deal, is still at a review stage with various options on the table, the U.S. State Department said Monday.

Department spokesman Sean McCormack would not go into details, saying only the North Koreans were working through various possibilities. "We will see which one they settle on as workable," he said at a daily briefing.

Press reports over the weekend said a South Korean bank may serve as an intermediary in delivering US$25 million from Macau to a third country. Some said North Korea initially asked a New York bank to play that role but that was rejected by the U.S.

A State Department official, speaking on condition of anonymity, did not flatly reject either of the possibilities.

He said the use of a South Korean bank "could well end up being a solution," but added "at this point, I wouldn't focus too heavily on it." Asked if a New York bank remains an option, he only said there were a "lot of different options people are looking at."

Macau's Banco Delta Asia (BDA) had frozen the $25 million after the U.S. Treasury accused it of laundering money for Pyongyang.

North Korea called it sanctions and used the case to boycott six-nation denuclearization talks for more than a year.

Pyongyang came back and signed a deal in February to shut down its key nuclear reactors within 60 days of the agreement, which was April 14. The deadline passed as North Korea, Macau and the U.S. haggled over how the money should be transferred out to a third country bank.

BDA, meanwhile, complicated matters Monday with a petition challenging Treasury's ruling on the bank that prohibits U.S. institutions from doing business with it.

"There is no evidence that the bank was complicit in North Korean counterfeiting, as Treasury suggests," BDA chairman Stanley Au said in a statement through his lawyers.

"Drastic action that threatens the bank's very existence has been taken without any specific charges being made and without any evidence of wrongdoing on the part of the bank or its owners," Au said.

Au charged that the U.S. had encouraged his bank to keep doing business with North Korea even after being told that the BDA had found deposits of thousands of fake U.S. dollars.

"They (the U.S.) said that they would like us to continue to deal with them (North Koreans), as it was better than we conducted this business rather than another financial entity that may not be so cooperative with the U.s.," Au said.

WASHINGTON, May 7 (Yonhap News)