TV footage showed the 30-metre (99-foot) tower engulfed in a huge cloud of smoke as a landmark piece of the country's nuclear history collapsed in ruins.

"It was a significant and very important step," US State Department official Sung Kim told a reporter at the scene.

"As I saw it, it was a complete demolition."

The cooling tower at Yongbyon, 96 kilometres (60 miles) north of Pyongyang, was the most visible symbol of the communist state's decades-old pursuit of nuclear weapons.

It produced the plutonium for a programme which culminated in a nuclear test in October 2006.

Yongbyon had already been largely disabled under a six-party disarmament pact.

The demolition came a day after the North handed over a long-awaited declaration of its nuclear activities, a move expected to end the stalemate in the six-party negotiations on disarming the poor and isolated state.

In response, US President George W. Bush announced he was partially lifting some Trading With The Enemy Act sanctions.

He also notified Congress he was removing North Korea from the US list of state sponsors of terrorism, effective after a 45-day review period.

North Korea, in its first comment on the developments of the past two days, said it welcomed the US move on the terror list as a "positive step."

Japanese Prime Minister Yasuo Fukuda said the demolition marked a "first step" towards denuclearisation.

"It is important that we carry out thorough verifications. We will deal with this seriously," he told reporters in Tokyo.

South Korea's chief nuclear envoy Kim Sook said the world had witnessed "the cooling tower that has stood at Yongbyon for the past 22 years being reduced to dust in a matter of seconds."

The declaration and the demolition were "two significant steps," he told reporters. "However, there is a long way to go to complete denuclearisation," he added, stressing the need for verification.

The need for further action was echoed by the White House.

"There is still much to be done, but it's a good step when the North Koreans comply with their obligations," said National Security Council spokesman Gordon Johndroe.

The United States said Friday it contributed 2.5 million dollars for the demolition of the cooling tower.

Bush, in guarded comments on Thursday, termed Pyongyang's nuclear declaration as an "important step" but said it was only the start of the process.

"We will trust you only to the extent that you fulfil your promises," he told the North, the country he once branded as part of an "axis of evil."

A battery of other sanctions against the North remain in force.

The delisting can also be put on hold if the North fails to meet US demands that it allow its declaration -- especially the size of the plutonium stockpile -- to be rigorously verified.

The declaration delivered to six-party talks host China was said to give details of nuclear facilities and of Yongbyon's production over the past two decades of plutonium for bomb-making.

It does not disclose any information on nuclear weapons, an issue to be tackled in the next phase of the six-party deal.

China on Friday handed over the dossier to the other six-party nations, said chief US negotiator Christopher Hill.

"All the nuclear materials and fissile materials and bomb-making materials" were listed, Hill told reporters in the Japanese city of Kyoto, where Group of Eight foreign ministers were meeting.

The ministers said the goal should be the "abandonment of all nuclear weapons and existing nuclear programmes by North Korea."

The North is getting one million tons of fuel oil or equivalent energy aid, plus the terrorism delisting, in return for disabling Yongbyon and delivering the declaration.

The six parties -- North and South Korea, Japan, Russia, China and the United States -- are expected to meet in Beijing early next month.

They will discuss ways to verify the document, complete the disablement and prepare for the final phase: the dismantlement of plants and handover of all nuclear material including weapons.

Full six-party negotiations could resume within months, Interfax cited Russia's foreign ministry as saying Friday.

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