WASHINGTON (REUTERS) - The United States signaled to North Korea on Thursday that it could improve its strained ties with Washington by releasing US citizens, after Pyongyang detained an 85-year-old retiree from California who is an American veteran of the Korean War.

North Korea last month detained Mr Merrill Newman, a veteran of the Korean War and a retiree from the upscale Northern California city of Palo Alto, taking him off a plane as he was about to leave the country where he had been visiting on a tourist visa.

The reclusive Asian nation has also held Korean-American Christian missionary Kenneth Bae since November 2012, sentencing him to 15 years of hard labour. His detention followed a long series of acrimonious exchanges between North Korea and the United States over Pyongyang's nuclear program.

"North Korea could send a very different signal about its interest in having a different sort of relationship with the United States were it to take that step of releasing our citizens, and it's a matter of some wonderment to me that they haven't yet moved on that," Mr Glyn Davies, US special representative for North Korea policy, told reporters in Beijing.

The United States has not formally confirmed that Mr Newman has been detained by North Korea, citing privacy laws. But the detention has been confirmed by Mr Newman's son and neighbours in his California retirement community, where his trip to North Korea had been announced in a community newsletter.

"This is obviously one of those moments when North Korea needs to figure out where it's heading and recognise that the United States of America is not engaging in belligerent and threatening behaviour," Secretary of State John Kerry told MSNBC television.

"These are all very, very disturbing choices by the North Koreans...This kind of behavior is unacceptable." Mr Kerry said.

The Newman case has drawn the involvement of former New Mexico Governor Bill Richardson, a periodic troubleshooter on North Korean issues who was US ambassador to the United Nations in the 1990s.

Mr Richardson has made numerous trips to North Korea that have included efforts to free detained Americans. In January, he delivered a letter for Mr Bae to officials in North Korea.

Asked by email whether Mr Richardson was looking into Mr Newman's detention, spokesman Caitlin Kelleher told Reuters: "Governor Richardson is involved in that he is in touch with his North Korean contacts." She gave no further details.

Mr Newman's detention occurred a day after he and his tour guide spoke with North Korean authorities at a meeting in which his military service in Korea was discussed, his son, Jeff Newman, told CNN on Wednesday.

Mr Newman served as a US infantry officer in the Korean War, which started in 1950 when the United States rallied the United Nations to send troops to counter the North's invasion of the South.

The war ended in a stalemate in 1953, with the absence of a peace treaty resulting in a demilitarized zone that now separates North and South Korea. Pyongyang commemorated the day with a massive military parade and declared victory as well.

After serving in the war, Mr Newman later worked as a manufacturing and finance executive before retiring in 1984, according to a biography of him in a February 2012 newsletter from Channing House, his retirement home.

Neighbour Brian Trankle, who said he frequently had breakfast with Mr Newman before the trip, has described him as an adventurous world traveler who used to have a boat and cruised the Pacific, and who had been excited about the trip.

Mr Joe Davis, spokesman for the Veterans of Foreign Wars, said it was common for US veterans to return to countries where they once fought, calling the detention unfortunate and saying it "does North Korea no good in the eyes of the world."

"He wants to go back and visit where he was young once. He wants to see where he went to war," Mr Davis said, expressing disappointment at the detention. "We hope that US diplomatic efforts can bring an end to this."

An estimated 1,200 to 1,500 Americans a year visit North Korea, said Ms Andrea Lee, chief executive of Uri Tours, a New Jersey-based company that organises one to two tours a month to North Korea. The trip that resulted in Mr Newman's detention was not arranged through her company, she said.

With increased foreign travel to North Korea, a number of "boutique hotels" are being built and the country has developed the Masik Pass ski resort which is also attracting attention, she said.

"People consider (North Korea) to be one of the last frontiers in travel; it's a place that not many people go to which is a draw in itself," she said.