Jan. 7 (Bloomberg) -- Intelligence officials are growing more concerned that North Korea, deadlocked in negotiations to end its nuclear arms program, is secretly enriching uranium, U.S. National Security Adviser Stephen Hadley said today.

Talks failed to persuade the North Korean regime to support procedures that would verify the extent of its plutonium-based nuclear work after the communist nation last month refused to allow the taking of soil and atomic waste samples. China, South Korea, Japan and Russia are working with the U.S. on the diplomacy.

“North Korea will test the new administration by once again trying to split the six parties and renegotiate the deal,” Hadley told an audience in Washington at the Center for Strategic and International Studies, a public-policy group.

While North Korea turned over documents related to its plutonium production in the course of the negotiations last year, the country has denied enriching uranium, another route to building a nuclear weapon.

A verification accord is needed particularly “because some in the intelligence community have increasing concerns that North Korea has an ongoing covert uranium-enrichment program,” Hadley said in a wide-ranging review of the Bush administration’s foreign policy record that touched issues including Iran.

2002 Talks

The U.S. concluded in 2002, based on intelligence information, that North Korea had a uranium-enrichment program. While North Korean officials seemed to confirm it indirectly during talks in the capital Pyongyang that year, they later backed away from it, said Michael Green, a former North Korea adviser to Bush who was in the U.S. delegation for those negotiations.

Reports surfaced last year that documents North Korea turned over to the U.S. on its plutonium program and aluminum tubes submitted as proof that there was no uranium program actually showed traces of highly enriched uranium, Green said.

“My sense is that, because of what Steve Hadley said, there’s probably more than that,” said Green, now an analyst at the strategic studies center. “It struck me that he used the word ‘ongoing.’”

South Korea also has increasingly raised concerns that its neighbor to the north is enriching uranium, Green said.

Terrorism List

The diplomatic effort advanced far enough last year that President George W. Bush removed North Korea from the U.S. list of state sponsors of terrorism in October in exchange for a pledge to proceed with the verification agreement.

North Korea probably won’t break the deadlock before Bush leaves office this month, State Department spokesman Robert Wood said today.

“It’s an issue that the new administration will be dealing with,” Wood told reporters in Washington in response to a question.

The top U.S. intelligence official told Congress last February that North Korea is maintaining its uranium-enrichment program and remains a risk for the spread of nuclear weapons.

“While Pyongyang denies a program for uranium enrichment, and they deny their proliferation activities, we believe North Korea continues to engage in both,” Director of National Intelligence Michael McConnell told the Senate Intelligence Committee on Feb. 5.

Christopher Hill, the chief U.S. negotiator in the six- nation talks, said later that month that North Korean officials told him they could prove that some of the purchases of equipment and materials that prompted American suspicions weren’t intended for that purpose.

‘Leverage on Iran’

Another nuclear issue, the prospect of an Iran with atomic weapons, will pose the biggest challenge in the Middle East for President-elect Barack Obama, Hadley said. The U.S. has pursued a strategy of imposing sanctions on Iran while offering economic and diplomatic incentives to give up uranium enrichment, which Iranian officials say is being pursued only to produce energy.

Bush will leave the Obama administration “with significantly increased leverage on Iran,” he said. “The issue is how the new team will use this leverage to produce a different Iranian policy on its nuclear program, terrorism and Middle East peace.”

Bush Record

Hadley cited foreign policy areas where he said Bush has succeeded. They included expanding the North Atlantic Treaty Organization to take in 10 European nations once under the influence of the Soviet Union, sealing a nuclear-energy cooperation agreement with India, bolstering development in Africa, persuading Libya to give up terrorism and weapons of mass destruction and re-establishing a Middle East peace effort with the November 2007 conference in Annapolis, Maryland.

Improved relations with Europe should allow Obama to diversify the continent’s oil and gas supply, impose tougher sanctions on Iran and even “bring freedom to Belarus,” Hadley said.

The Bush administration, which once referred to Belarusian President Alexander Lukashenko’s rule as the last dictatorship in Europe, has said the regime is improving its human rights record.

Hadley urged Obama to build on Bush’s efforts to link the countries of Central Asia with those of South Asia in “a new axis of trade and energy” that would help stabilize regions that include India, Pakistan, Kazakhstan and Afghanistan.

To contact the reporter on this story: Viola Gienger in Washington at vgienger@bloomberg.net.

Last Updated: January 7, 2009 17:38 EST