North Korea is negotiating with a French construction company to build a 1,000-room, 46-story hotel in its capital, Pyongyang, according to an official at the company's headquarters. It would be the first foreign investment in North Korea and the country's first international-class hotel.

Roland Duerin of the Paris-based Compenon Bernard Construction said in an interview that talks on the hotel had been going on for three or four months but that no agreement had been reached. However, North Korean sources in Tokyo said an accord was signed earlier this month, giving the French company a 50-percent stake in the project.

North Korea recently enacted a law allowing foreign companies to invest in joint ventures with government corporations. Until then, it had been closed to outside capital in a policy of economic "self-reliance."

Many analysts here see the law as part of a campaign to ease relations with western countries, which tend to be sympathetic to the rival South Korean government in Seoul.

Talks on the hotel come just as France and North Korea, which have no diplomatic relations, have agreed to make cultural, scientific and technological exchanges. North Korean officials say French firms have also expressed interest in brewing and aviation ventures.

Duerin said a management firm that his company has lined up would run the hotel. It was unclear from his account whether the French company would be an investor or just a contractor. He denied the report that his side would own half of the hotel but declined to discuss financial arrangements further. "It's under negotiation," he said.

The project was disclosed by the General Association of Korean Residents in Japan, which is politically aligned with Pyongyang. An official of the association put the height of the planned hotel at 50 floors, which would make it the tallest building in the city.

It would be built on an island in the Taedong River, which runs through the capital, and would cater to foreign visitors, he said.

According to the official, the government hopes Pyongyang will be the site of international conferences, such as the next meeting of the nonaligned movement, and is concerned about accommodations for delegates.

The government had talked earlier to a Japanese company about a hotel, he said, but discussions ended after the Japanese government put sanctions on North Korea, which it blamed for a bombing in Rangoon last year that killed 17 South Korean officials.