"The North Korean side appears to have suggested ways to peacefully resolve the nuclear dispute, through the top US negotiator (Christopher Hill) to six-party talks and issued an ultimatum related to this," said Choson Sinbo, newspaper of a pro-Pyongyang Korean group in Japan.

It gave no details but predicted a breakthrough if Washington responds positively to the proposals.

Hill visited Pyongyang last week to try to rescue a six-nation deal which is crumbling because of a dispute over verification of the North's declared nuclear programme.

The US negotiator said on his return he had had "very substantive" talks but gave no immediate details.

"A bold and epochal solution might have been forwarded (from the North) as time is running short ahead of the US presidential election," said Chosun Sinbo, which normally reflects the hardline communist state's thinking.

"The six-party talks, reactivated after North Korea's underground nuclear test in October 2006, may break down if the two sides fail to reach an agreement," it said.

In such a case North Korea may try to reverse its nuclear disablement to strengthen its hand in negotiations with the next US government, the daily said.

But Hill's trip shows it does not want to waste the diplomatic efforts made so far, the paper said. The US negotiator had been invited by Pyongyang.

Pyongyang accepted the six-nation aid-for-disarmament deal in February 2007, just four months after staging its nuclear test.

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

But 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 agree on inspection procedures to ensure it is telling the truth in its declaration.

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

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