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By Andrew Quinn
WASHINGTON, March 9 (Reuters) - U.S. Secretary of State Hillary Clinton said on Friday that the United States and South Korea were making progress in discussions on the implementation of new U.S. sanctions on Iran but stopped short of announcing any deal on a potential waiver.
South Korea, Japan and other U.S. allies have been scrambling to voluntarily reduce Iranian oil imports in hopes of winning waivers from penalties imposed by a new U.S. law on Iran sanctions that takes effect this year.
"I would be the first to say we recognize the difficult decisions and even the sacrifices that we are asking from other countries in order to increase this pressure on Iran," Clinton told reporters following talks with South Korean Foreign Minister Kim Sung-hwan.
"We will just continue our work together. We're making progress, and I think that is our assessment at this time," she said.
Clinton and Kim also pledged to step up cooperation between Washington and Seoul as the two countries assess prospects for resuming "six party" nuclear negotiations with North Korea along with Japan, China and Russia.
Clinton said the United States, South Korea and Japan would soon hold a joint meeting to discuss the next steps after Pyongyang's surprise announcement last month that it would stop long-range missile tests, nuclear tests and uranium enrichment and allow U.N. inspectors back into the country to verify compliance.
"This is a modest step in the right direction and we will be watching closely and judging North Korea's leaders by their actions," Clinton said.
Washington and Seoul agreed there can be no fundamental improvement in U.S. relations with North Korea until Pyongyang takes steps to improve ties with South Korea - which it has recently denounced despite the February announcement of its nuclear moratorium.
"Continued coordination between the Republic of Korea and the United States will be the single most important factor in the coming discussion of the six-party talks," Kim said, adding that both sides would be looking for "faithful implementation" of Pyongyang's nuclear pledges.
But many in South Korea are watching first for any sign that the United States may grant Seoul a waiver to the new sanctions that U.S. President Barack Obama signed into law on Dec. 31 in his latest effort to pressure Tehran over its nuclear program.
The U.S. law targets foreign financial institutions that do business with Iran's central bank or other blacklisted Iranian financial entities, and Obama has until March 30 to decide whether the price and supply levels of non-Iranian oil and fuels such as gasoline, diesel and jet fuel in global markets are sufficient for countries to "significantly" reduce their Iranian purchases.
Clinton said the United States was "deeply gratified" by South Korea's efforts to join in pressuring Tehran, but indicated that discussions on any potential waiver were still ongoing.
"We are continuing our very close expert engagement," Clinton said, adding that talks with South Korea and others involved not only efforts to reduce Iranian oil purchases but also boosting production to shore up price stability and find alternative supply sources.
"We are participating in the sanctions on Iran and we will keep discussing the specific measures to do that as well," Kim said. (Reporting By Andrew Quinn; Editing by Vicki Allen)