In the latest diplomatic kerfuffle between the United States and North Korea, a planned meeting between North Korean and Treasury officials was scrubbed this week over a dispute about the meaning of the word "bilateral."

The issue may seem arcane, but it has achieved outsize importance among North Korea watchers as a sign that the Bush administration has begun to limit its diplomatic flexibility in dealing with North Korea since a tentative agreement was reached in September for North Korea to give up its nuclear programs.

State Department officials deny that, but the net result is that a group of senior North Korean officials -- including Vice Foreign Minister Kim Gye Gwan -- decided not to travel to New York for planned meetings with U.S. officials Dec. 9 to 11.

The dispute has its roots in the last round of six-nation talks on North Korea's weapons programs, conducted last month in Beijing. During the talks, the North Korean officials complained bitterly about recent Treasury Department actions against companies and banks allegedly involved in counterfeiting, money laundering and arms proliferation on behalf of North Korea.

Kim labeled the actions "economic sanctions," but Assistant Secretary of State Christopher R. Hill responded that they were law enforcement actions unrelated to the talks. He suggested that North Korean officials come to the United States for a briefing on the matter.

The trouble started when Kim declared after the talks that Hill had agreed to have "bilateral contacts" to "settle the issue of financial sanctions." Some U.S. officials thought that sounded too much like normalization of relations before a deal on North Korea's weapons was even settled, sources said, even though the planned briefing would have been given by only low-level technical experts from Treasury and the Secret Service.

State Department officials say Kim or his deputy would have been welcome to come to New York for the briefing, but they made it clear neither Hill nor his deputy would attend. North Korean officials interpreted that statement as Hill withdrawing the invitation, and formally told U.S. officials yesterday they had canceled the trip.