The talks at Kaesong, North Korea's southernmost city near the inter-Korean border, until Saturday will focus on the shipment of 50,000 tons of heavy fuel oil to the communist state, the ministry said.

"Following the talks, we will sign a contract (to buy and carry the fuel to the North)," a ministry official told journalists.

"It is too early to say when, but it will take at least three weeks to start the shipment," he said.

The talks opened as UN inspectors continued a visit to North Korea to discuss the closure of a nuclear facility in Yongbyon, which is at the centre of the country's controversial atomic programme.

It marks the first time in nearly five years that International Atomic Energy Agency inspectors have had access to the Yongbyon reactor, a source for potential bomb-making material.

South Korea will pick up the bill for the 50,000 tons of fuel, which is an initial tranche of energy aid promised in the February disarmament agreement.

North Korea is to receive initial aid equal to 50,000 tons of heavy fuel oil for shutting down and sealing the facility at Yongbyon, 90 kilometres (56 miles) north of Pyongyang.

The North can receive up to another 950,000 tons in heavy fuel oil or the equivalent in aid if it disables the Yongbyon facility and declares all its nuclear programs to the UN nuclear watchdog.