* Top US diplomat rejects ties with nuclear North Korea
* Clinton takes hard line as US considers bilateral talks
* Sanctions will not be relaxed without concrete steps (Adds quotes, background)
By Arshad Mohammed
WASHINGTON, Oct 21 (Reuters) - U.S. Secretary of State Hillary Clinton rebuffed North Korean hopes it may be accepted as a nuclear state, saying the United States will never have normal, sanctions-free ties with a nuclear-armed North Korea.
Clinton laid down a hard line as the United States weighs whether to engage in bilateral talks with North Korea, a step it hopes will bring Pyongyang back to wider, six-party talks on ending its nuclear programs.
The North, which conducted its second nuclear test in May, has said it wished to be treated as a nuclear state.
While repeating the U.S. openness to bilateral talks with North Korea, Clinton said the United States would not soften its sanctions on Pyongyang.
"Current sanctions will not be relaxed until Pyongyang takes verifiable, irreversible steps toward complete denuclearization," Clinton said in a speech hosted by the United States Institute for Peace think tank.
"Its leaders should be under no illusion that the United States will ever have normal, sanctions-free relations with a nuclear-armed North Korea," she added. "We are prepared to meet bilaterally with North Korea. But North Korea's return to the negotiating table is not enough."
The United States hopes a bilateral dialogue may bring North Korea back to six-party talks involving the two Koreas, China, Japan, Russia and the United States on ending the North's nuclear programs.
Those discussions have been stalled since North Korea quit them six months ago.
The North recently telegraphed it wanted better relations with Washington, freeing two jailed U.S. journalists in August and signaling two weeks ago that it could return to the six-way talks but wanted to talk to the United States first.
It is unclear what may have triggered the recent warming.
After Pyongyang conducted its second nuclear test, the U.N. Security Council imposed fresh sanctions on North Korea that are designed to restrict its arms sales, which provide a vital source of hard currency for the impoverished country.
The United States, which has said it has not decided on bilateral talks, wants some assurance North Korea will actually return to six-party talks and recommit to abandoning its nuclear programs before engaging directly.
The State Department last week said it had decided to grant a visa to Ri Gun, North Korea's No. 2 official at six-party talks, to attend meetings in New York and San Diego.
U.S. analysts said that by allowing Ri to visit, the Obama administration might be signaling a desire to explore whether direct talks between the United States and North Korea might lead to a resumption of wider denuclearization talks.
The United States wants North Korea to give up its nuclear programs, which it sees as a direct threat to U.S. allies South Korea and Japan, while North Korea has recently made clear that it wants to be accepted as a nuclear state.
(Editing by Doina Chiacu)