China says won't take sides in Korea dispute

China, which has refused to condemn North Korea's attack on a southern island, said on Wednesday it would not favour any side but wanted to help resolve the dispute as a "responsible great power".

China, North Korea's only powerful ally, protected Pyongyang from censure by the UN Security Council for last week's deadly bombardment of Yeonpyeong island, an attack many analysts believe was an attempt to force the resumption of international negotiations that could bring it aid.

"Our general goal is for all sides to exercise calm and  restraint and to make every effort to avoid such incidents  recurring," Chinese foreign minister Yang Jiechi said as South Korea planned further military drills for next week after US warships leave on Wednesday.

"Since the exchange of fire between North and South Korea, China has made a series of efforts to prevent the situation  from escalating and deteriorating. China decides its position  based on the merits of each case and does not seek to protect  any side," Yang said.

Yang spoke as Chen Zhili, vice-chairperson of the Standing  Committee of the National People's Congress, met a delegation from North Korea.

China wants to hold an emergency meeeting of the six regional powers, but the proposal has met with a  lukewarm response.

South Korea is planning further artillery drills, "including waters close to the Yellow Sea border (with the  North)" starting on Monday, Yonhap said.

The defence ministry would not comment on the report. Such drills are common and the exercise would be west of  Yeonpyeong, Yonhap said.

The plan was to "beef up its defence readiness posture against any possible additional provocations by North Korea", the news agency said, quoting officials.

As the nuclear-powered USS George Washington headed out of Korean waters back to Japan, oil traders said the US Navy was seeking a medium-range oil tanker to move at least 30,000  tonnes of jet fuel from Japan to South Korea, suggesting it was stockpiling. The route is unusual for jet fuel, but a US military  official said such shipments were standard for operational use.

Nearly 30,000 US troops are based in South Korea, which is still technically at war with the North, having only signed a truce to end fighting in the 1950-53 war.

An attempt by France and Britain to push the UN Security Council to condemn North Korea's nuclear programme and the attack on Yeonpyeong was on the verge of collapse because of  China's unwillingness to apportion blame, envoys said.

The reason for the virtual breakdown of talks on two  Security Council statements to rebuke Pyongyang was China's demand for removal of words such as "condemn" and "violation".

The United States and South Korea are pressing China, which has not blamed North Korea for the island attack or for the sinking of a South Korean naval vessel in March, to do  more to rein in its ally.

President Lee Myung-bak, widely criticised at home for a perceived weak response to the attack, has twice warned that any further provocation would be met with force.

Outgoing defence minister Kim Tae-young told lawmakers on Tuesday that there was an "ample possibility" the North may stage another provocation after the joint manoeuvres end.

South Korea's credit default swaps rose to a three-month high, reflecting geopolitical risk, Yonhap Infomax news agency said. But stocks ended up one percent and the won currency was  up 0.7%.

Many analysts believe North Korea's attack, continual threats of all-out war and its boasting on Tuesday of huge nuclear advances are aimed at holding the world's attention as it seeks aid and other economic sweeteners with the resumption of so-called "six-party talks" it walked out of two years ago.

North Korea has conducted two nuclear tests to date and is  believed to have enough fissile material from its plutonium-based programme to make between six and 12 bombs.

It is also seen as a proliferation risk, accused by the West of supplying Syria, and possibly Iran, with nuclear know-how.

South Korea's foreign ministry said on Tuesday the North's nuclear programme, the attack on Yeonpyeong and a Chinese proposal for emergency talks would be raised at a meeting of  foreign ministers in Washington in early December.

South Korea, Japan and the United States, three of the six countries involved in the on-off disarmament talks, will attend.