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* U.N. agency has been working with Pyongyang on new air route
* U.S. move a negotiating tactic before summit - source
* N. Korea asked for U.S.-produced aviation charts - sources
MONTREAL/SEOUL, Feb 18 (Reuters) - The United States has blocked efforts by a U.N. agency to improve civil aviation in North Korea at a time when Pyongyang is trying to reopen part of its airspace to foreign flights, three sources familiar with the matter told Reuters.
The U.S. move is part of a negotiating tactic to maintain sanctions pressure on North Korea, one of the sources said, ahead of a second summit between President Donald Trump and leader Kim Jong Un in Vietnam in late February.
Washington is seeking concrete commitments from Pyongyang at the summit to abandon its nuclear and missile programmes.
The United Nations' International Civil Aviation Organization (ICAO), with 192 member countries, has been working with Pyongyang to open a new air route that would pass through North and South Korean airspace.
Airlines currently take indirect routings to avoid North Korea due to the threat of unannounced missile launches, which have been witnessed by some passengers on commercial flights.
If the space was deemed safe, international airlines could save fuel and time on some routes between Asia and Europe and North America, and North Korea could begin reviving its own commercial aviation industry.
The cash-strapped country has a population of more than 25 million but its economy has been squeezed by a series of sanctions for its nuclear and ballistic missile programmes.
Montreal-based ICAO was prepared to help improve North Korea's aviation system by leading training sessions between its military and civil aviation staff, two sources said.
North Korea also asked ICAO for access to U.S.-produced aeronautical charts, they said.
U.S SEEKS LEVERAGE
But the United States discouraged the U.N. agency from helping North Korea with its air programme as Washington wanted to "pool all the leverages and incentives" until Pyongyang makes substantial progress on denuclearisation, a third source said.
"They would keep tight hold of all available leverage to make sure there is no loophole until the North Koreans take action that deserves a reward," the source said.
All sources spoke on condition of anonymity due to the sensitivity of the matter.
ICAO cannot impose binding rules on governments, but wields clout through its safety and security standards which are approved by its member states.
Asked for comment, a U.S. State Department official said it does not publicly discuss details of diplomatic conversations. An ICAO spokesman did not immediately respond to a request for comment.
The North Korean mission to the United Nations in New York did not respond to a request for comment and there was no immediate reaction from South Korea's foreign ministry.
In 2017, the United States proposed the U.N. Security Council freeze the assets of state-carrier Air Koryo, which flies to a handful of cities in China and Russia, as part of new sanctions on Pyongyang. The measure was dropped during negotiations between the 15 members.
Airlines including Air Koryo and Air China Ltd offer less than 200,000 available seats a year in the North Korean market, according to a January note from independent research firm CAPA Centre for Aviation.
That compares with over 13 million seats available in the South Korean market, which has roughly double the population, CAPA said.
The biggest beneficiaries of lifting air restrictions over North Korea would be South Korean carriers including Korean Air Lines and Asiana Airlines Inc, according to CAPA.
The United States has doubled down on sanctions enforcement ahead of the planned second summit amid concerns Pyongyang is not committed to denuclearisation, though Washington promised to relax some rules on humanitarian aid.
South and North Korea, meanwhile, have rapidly advanced relations, which prompted U.S. officials to openly warn against moving too quickly without sufficient progress on denuclearisation.
A fourth source told Reuters that the U.S. move to facilitate humanitarian aid was intended to appease South Korea, facing some complaints that Washington is not willing to make any concessions.
"But they made it clear that there will be no relief of economic sanctions until they see substantial progress," said the source who also spoke on condition of anonymity due to the sensitivity of the issue. (Reporting By Allison Lampert in Montreal and Hyonhee Shin in Seoul. Additional reporting by Jamie Freed in Singapore, David Shepardson in Washington and Michelle Nichols in New York; Editing by Tracy Rucinski and Lincoln Feast)