The nation hosting the six-party talks is looking to build on the momentum of two lengthy bilateral contacts between main protagonists North Korea and the United States as pressure mounts for progress in the three-year standoff.

"We are facing challenges and we are also facing difficult-to-come-by opportunities," said Wu Dawei, China's chief delegate to the talks, according to China Central Television.

"We should, with the greatest political courage, seize the opportunity to resolve the challenges and jointly chart a better future for Northeast Asia."

The second day of talks got under way Wednesday on an optimistic note after what were described as positive contacts Monday and Tuesday between the Stalinist state and the United States.

Both have adopted a less confrontational tone than in the previous three rounds.

Chief US envoy Christopher Hill told reporters late Tuesday he had "good discussions" with his North Korean counterpart Kim Kye-Gwan on the first day of the talks that also involve China, Japan, Russia and South Korea.

"It was very businesslike. We avoided any rhetoric. It was an effort to get all the issues on the table, to make sure we know what is important to each of us, so it was positive in that sense," he said.

The two sides discussed the US proposal put forward in June 2004 that required North Korea to give an up-front pledge to dismantle all its plutonium- and uranium-based weapons programmes before receiving any energy or other assistance.

North Korea at the time rejected the US offer and instead wanted a step-by-step approach to dismantling its atomic arms programmes.

"We talked about the June proposal, talked about the sequencing of the proposal, the importance they attach to the sequencing where they don't want to have to have obligations ahead of other people's obligations," said Hill.

This remains a key sticking point and Russia's representative Alexander Alekseyev urged the two sides to be flexible.

"We are sure that the nuclear problem on the Korean peninsula can only be resolved in stages, in moving towards each other's position," he told Russian news agency RIA Novosti.

"We aim for the US and North Korea to have full and broad flexibility."

In an effort to reach a breakthrough, South Korea has offered to provide the North with 500,000 tonnes of rice and some 2,000 megawatts of electricity if it abandons its nuclear ambitions.

Convoys of rice began crossing the heavily-fortified Korean border Tuesday.

In opening remarks to the talks Tuesday both sides bowed to pressure and adopted a more conciliatory approach. The US told North Korea it views it as a sovereign nation and will not attack it.

Pyongyang has long urged the US to establish diplomatic relations and provide assurances of non-aggression if the deadlock is to be broken.

For its part, North Korea said it wants to work towards a nuclear-free Korean peninsula.

Each delegate Wednesday delivered another short keynote address to a plenary session behind closed doors at the Diaoyutai State Guesthouse before they split into smaller groups.

Japan's chief delegate Keinichiro Sasae said the onus was now on North Korea to start making decisions.

"Japan is ready to commit itself to providing security guarantees in return for North Korea's commitment to abolishing its nuclear program," he said.

"As for energy assistance, Japan welcomes the South Korean government's initiative through its 'important proposal'."

North Korea abandoned the six-party talks last year, complaining of a hostile US policy, and has since claimed it already possesses nuclear weapons.

But the softer US approach, coupled with a threat to take the issue to the United Nations, enticed it back to the negotiating table and the delegates to the talks say the atmosphere is much better than before.

The standoff was sparked in October 2002 when Washington accused the North of operating a nuclear weapons programme based on enriched uranium in violation of a 1994 agreement.

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