pNorth Korea dismissed U.S. allegations that funds had been diverted from a U.N. aid program, saying Thursday that all activities had been conducted legally.

The U.N. aid projects in North Korea "have been carried out strictly in conformity with the U.N. regulations and in a transparent way," a spokesman for the North's Foreign Ministry said in a statement carried by the official Korean Central News Agency.

The unidentified spokesman also rejected the allegation as a "sheer fiction" against the North.

Earlier this week, U.N. Secretary-General Ban Ki-moon announced an audit would be conducted of the U.N. Development Program in North Korea after the U.S. alleged the program had funneled millions of dollars to Kim Jong Il's regime.

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U.S. officials have raised concerns the cash might be misused, possibly for Pyongyang's nuclear program, saying the UNDP's North Korea operation had been run "in blatant violation of U.N. rules" for years.

But the UNDP has sought to refute the U.S. allegations, insisting that it is committed to operating in a transparent manner and that the North Korean program followed UNDP financial rules.

The North's angry reaction came as the United States and its regional partners are seeking to set a date for a fresh round of the international talks aimed at ending North Korea's nuclear weapons program.

The disarmament talks — which include the United States, China, the two Koreas, Japan and Russia — are expected to resume by mid-February, according to officials. The latest talks in December — the first since the North's nuclear test in October — ended with no apparent progress.

Optimism has recently grown after the United States offered North Korea unspecified concessions during bilateral talks in Berlin last week. The North's Foreign Ministry has said without elaborating that the meeting in Germany produced an agreement.

In 2005, North Korea pledged to dismantle its nuclear program in exchange for security guarantees and aid but no progress has since been made in implementing that accord.

The cash-strapped country, the spokesman said, would continue to develop cooperative relations with the UNDP and other U.N. agencies but said it would not accept conditional or unjust aid at all.

North Korea "will not allow any attempt to politicize the aid project," the spokesman said.

The spokesman also warned that the U.S. will be wholly accountable for all consequences to be entailed by its ongoing "reckless campaign" against the North.

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