U.S. signals North Korea can improve ties by freeing Americans (Reuters) - The United States signaled to North Korea on Thursday that it could improve its strained ties with Washington by releasing U.S. citizens, after Pyongyang detained an 85-year-old retiree from California who is an American veteran of the Korean War. Months of hostile rhetoric early this year pushed tension to some of the highest levels in years with North Korea, which has conducted nuclear tests, threatening a nuclear strike on the United States and South Korea. North Korea last month detained 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 labor. 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," Glyn Davies, U.S. special representative for North Korea policy, told reporters in Beijing. The United States has not formally confirmed that Newman has been detained by North Korea, citing privacy laws. But the detention has been confirmed by Newman's son and neighbors 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 recognize that the United States of America is not engaging in belligerent and threatening behavior," 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," 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 U.S. ambassador to the United Nations in the 1990s. Richardson has made numerous trips to North Korea that have included efforts to free detained Americans. In January, he delivered a letter for Bae to officials in North Korea. Asked by email whether Richardson was looking into Newman's detention, spokeswoman Caitlin Kelleher told Reuters: "Governor Richardson is involved in that he is in touch with his North Korean contacts." She gave no further details. 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. Newman served as a U.S. 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, 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. Neighbor Brian Trankle, who said he frequently had breakfast with Newman before the trip, has described him as an adventurous world traveler who had a boat and cruised the Pacific, and who had been excited about the trip. Joe Davis, spokesman for the Veterans of Foreign Wars, said it was common for U.S. 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," Davis said, expressing disappointment at Newman's detention. We hope that U.S. diplomatic efforts can bring an end to this. The New York Times reported Newman and his traveling companion, Bob Hamrdla, who also lives at Channing House, stayed at the Yanggakdo Hotel in Pyongyang and visited a number of other places commonly seen by tourists. Those included Nampho, a city southwest of Pyongyang that is known for a series of dams, and the Kaesong industrial zone close to the border with South Korea, the paper reported. An estimated 1,200 to 1,500 Americans a year visit North Korea, said Andrea Lee, chief executive of Uri Tours, a New Jersey-based company that organizes one to two tours a month to North Korea. The trip that resulted in 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," Lee said. Reporting by Sharon Bernstein in Sacramento and Alex Dobuzinskis in Los Angeles; Additional reporting by Leslie Wroughton in Washington, Dana Feldman and Steve Gorman in Pasadena, Laila Kearney in Palo Alto; Writing by Daniel Trotta and Cynthia Johnston; Editing by Cynthia Osterman, Eric Walsh and Ken Wills