It was unclear whether the extension indicated Hill was making progress in trying to dissuade the hardline communist state from restarting the nuclear programme it shut down 14 months ago.

A US embassy spokesman said the assistant secretary of state would not be returning Thursday afternoon as expected, but had no information on when he would come back.

A South Korean foreign ministry official involved in six-nation nuclear negotiations also said Hill's delegation would not cross the border Thursday. "But we do not know exactly when they will return," he told AFP.

US officials in Washington earlier confirmed media reports that Hill would offer a face-saving compromise in his attempt to rescue the 2007 agreement which led the North to shut down its plutonium-producing plants.

Hill drove across the heavily fortified inter-Korean border at Panmunjom Wednesday en route to Pyongyang and talks with his counterpart Kim Kye-Gwan. He was to hold more talks Thursday, the US State Department said.

Despite the nuclear tensions, South and North Korea held their own talks Thursday -- their first official contact in eight months. But the military meeting at Panmunjom ended earlier than scheduled and with little progress.

The North threatened to evict all South Korean staff from a joint industrial estate at Kaesong unless Seoul stops civic groups spreading cross-border propaganda.

The South meanwhile demanded a halt to vitriolic attacks on its president, Lee Myung-Bak.

The six-party deal was reached in February 2007, just four months after the North's first nuclear test.

Pyongyang shut down its Yongbyon nuclear complex in July last year and began disabling it in November. In June it handed over a declaration of nuclear activities to talks host China.

Now the North is angry that the US failed to respond by removing it from a terrorism blacklist, as required under the accord. It says it will soon begin work to restart a plutonium reprocessing plant which could produce more bomb-making material from spent fuel rods.

Before delisting occurs, the US demands that the North accept an agreement on procedures to verify its declaration.

The North says verification is not part of this stage of the agreement. It accuses Washington of violating its dignity by seeking Iraq-style "house searches" for atomic material.

China, the North's sole major ally, is the focus of a possible face-saving compromise, US officials said Wednesday.

State Department spokesman Sean McCormack said only that Beijing could play the "special role" it has in the past "as a repository for documents and information."

A senior US official said the deal could see Washington remove Pyongyang from the blacklist if it submits written acceptance of the verification plan to China.

The official said the original idea was for the North to submit it to all five partners -- South Korea, China, Japan, Russia and the US.

The Washington Post last week reported that under the proposal, the US would provisionally remove the North from the blacklist and China would then announce North Korea's acceptance of the verification plan.

This would allow the North to claim that the US acted first.

However, McCormack denied that Hill was carrying proposed changes to the actual verification plan.

The US-inspired protocol reportedly calls for access to undeclared suspected nuclear facilities and for inspectors to take samples of material.

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