(Adds State Department spokesman)

By Jon Herskovitz

SEOUL, Aug 3 (Reuters) - The South Korean government has told Taliban insurgents holding 21 Koreans there is a limit to what it can do to resolve the hostage standoff that has stretched into a third week, an official said on Friday.

There has been some contact with the Taliban, and a South Korean delegation arrived on Thursday in the Afghan province where the Koreans are held hostage to try to hold direct talks with the kidnappers.

"Through our contacts, our foremost goal is to make it clear that there is a limit as to what our government can do to meet their demands of releasing the prisoners," presidential spokesman Chun Ho-sun said.

In Afghanistan, a Taliban spokesman said the group had another contact on Friday with the Koreans by phone and indicated readiness to hold talks in or outside the country.

But the spokesman, Qari Mohammad Yousuf, said the insurgents needed United Nations security guarantees should the Koreans want negotiations to be held outside Taliban-controlled areas.

Speaking to Reuters by phone from an undisclosed location, Yousuf said he did not know the Korean team's response.

Earlier, he had said the Taliban preferred to hold the negotiations in an area they control, and vouched for the safety of the Korean delegates.

He also said the group would deliberate over an offer by a team of private Afghan doctors who have volunteered to treat the remaining hostages, two of whom are reported to be seriously ill.

The Taliban have killed two of their male hostages, accusing the Afghan government of not negotiating in good faith and ignoring their demand to release rebel prisoners. The remaining hostages include 18 women.

The Taliban have repeatedly threatened to kill the rest if their demands are not met.

WASHINGTON MEETING

Separately, eight South Korean lawmakers met State Department officials in Washington on Thursday to seek help.

"We have confirmed the complete support and sympathy for the Korean hostages who are going through great distress," lawmaker Park Jin told reporters after the meeting.

The South Korean government has called for "flexibility," a comment analysts say is directed at the United States to sway the Afghan government to strike a deal with the kidnappers.

There have been calls among many left-leaning politicians for the United States to use its influence to resolve the issue but Washington has stood firm in its refusal to make concessions with groups, such as the Taliban, it considers terrorists.

Others in South Korea have warned such pressure could strain ties.

"We assess the United States is actively cooperating by all its means as best as it can. This is not a matter that should lead to anti-U.S. problems," the presidential spokesman said.

In Washington, State Department deputy spokesman Tom Casey reiterated the longstanding policy that the United States does "not make concessions to terrorists." But he said the United States does not oppose Seoul's contacts with the kidnappers.

"Conversations are not anything that anyone's ever objected to any more than we would object to a police negotiator talking to a hostage taker here domestically," he said. (With additional reporting by Jessica Kim in Seoul, Paul Eckert in Washington, and Sayed Salahuddin in Kabul)

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