North Korea never delivered on its side of the deal, fleecing Saddam Hussein of a 10-million-dollar down payment, the newspaper said.

It said the failed deal was first revealed in early October by US weapons expert David Kay, head of the US-created Iraq Survey Group (ISG) which is hunting for weapons of mass destruction in Iraq.

Investigators now believe that Iraq was trying to purchase Rodong missiles and a complete missile assembly line, in what appears to be its most serious violation of UN resolutions discovered thus far, the Times noted.

Investigators have been searching for something "far more nefarious" such as an ongoing nuclear program or an attempt to amass biological or chemical weapons, but "so far, there's really not much in that arena," an official told the daily.

The investigators also believe that several rounds of negotiations for the deal took place in Syria, with the apparently knowledge of the Syrian government.

Syria probably offered its ports and territory as a clandestine transit route for delivery of the missile technology, and is now sheltering the Iraqi official who brokered the deal, the Times said, quoting officials.

Asked about the matter Sunday, Syrian President Bashar al-Assad told the Times: "This is the first time I have heard this story."

Saddam Hussein "was never able to trust Syria and he never tried and we never tried to make any relation between him and any other country because he did not trust us in the first place," the Syrian leader was quoted as saying.