By Andrew Quinn

WASHINGTON (Reuters) - U.S. Secretary of State Hillary Clinton said on Friday she was encouraged by signs that North Korea may be preparing to return to stalled talks on its nuclear program.

Clinton spoke as two senior U.S. envoys on the North Korea issue wrapped up a tour to the region for talks with South Korea, Japan and China, which along with the United States are pushing to resume dialogue with Pyongyang.

"Ambassador Sung Kim and Ambassador Stephen Bosworth are quite heartened by the movement that we see in our joint efforts," Clinton told reporters after a meeting with South Korean Foreign Minister Yu Myung-hwan.

Clinton said the United States would keep working to pull North Korea back into the negotiations it abandoned a year ago, which increased uncertainty across the region.

"Ultimately it is up to the North Koreans, but we are encouraged by signs of progress to return to the talks that we are seeing," Clinton said.

A senior U.S. official, speaking on condition of anonymity, said the state of North Korea's battered economy could be one factor promoting the resumption of talks, which center on a deal to trade aid for disarmament.

"The reforms that North Korea have put in place have been a disaster. So North Korea is likely to require international assistance and this can create an opportunity," the official said.

"The conditions appear to be moving in the right direction. They have not said yes yet," the official said.

DESTITUTE AND DETERIORATING

U.N. sanctions and a botched currency move that nearly halted commerce late last year have increased pressure on the destitute North, and a senior U.N. official said recently that food and other aid from the United Nations and nongovernmental organizations met only a quarter of the country's needs.

Bosworth, the U.S. special representative for North Korea, told reporters in Beijing on Wednesday that talks with Chinese counterpart Wu Dawei had addressed how to try to regain momentum and get back to the negotiating table.

North Korea quit the so-called six-party talks -- which also include Russia -- and subsequently staged its second nuclear test last May, drawing international condemnation and a new round of U.N. sanctions.

Pyongyang has said it could end its nuclear arms program if the United States drops what North Korea calls a "hostile policy," and it has also demanded Washington agree to peace treaty talks and lift sanctions.

Washington has said North Korea's demands for aid and improved relations can be addressed only along with renewed nuclear disarmament steps by Pyongyang.

Chinese President Hu Jintao met a senior North Korean official this week as diplomatic efforts gather pace to bring the reclusive country back to the negotiations.

North Korea's chief nuclear envoy, Kim Kye-gwan, also recently paid a visit to China, which is the North's biggest benefactor and is seen as having the most influence on the hermit state.

North Korea previously put conditions on its return to the talks, including ending U.N. sanctions and having discussions with the United States on a peace treaty to replace the ceasefire that ended the 1950-53 Korean War.

Resuming the talks could ease concerns among market players about investing in the heavily armed peninsula, but was unlikely to cause any major movements in markets, analysts have said.

(Reporting by Andrew Quinn; Editing by Peter Cooney)