"The DPRK (North Korea) decided to return to the six-party talks on the premise that the issue of lifting financial sanctions will be discussed and settled between the DPRK and the US," the North Korean foreign ministry said.

World leaders welcomed North Korea's decision to rejoin the talks, which it had boycotted since November 2005 in protest at US financial sanctions, but the breakthrough was also greeted with some skepticism.

Christopher Hill, the lead US representative to the talks, said in Beijing he had told North Korean envoy Kim Kye-Gwan that Washington was willing to consider the matter.

"I said we would be prepared to create a mechanism or working group and to address these financial issues," he said. He stressed that it was too soon to celebrate and warned further stalling from Pyongyang would not be acceptable.

"We must achieve progress in these (next) sessions," he told reporters at Beijing's international airport, adding it "will be very difficult and we have a long way to go."

The six-way talks, which began in 2003, bring together North and South Korea, China, Japan, Russia and the United States.

North Korea agreed in September 2005 to scrap its nuclear programs in exchange for energy and security guarantees, but later quit talks in protest at US sanctions aimed at barring it from the international banking system.

Pyongyang angered the international community in July when it test-fired seven missiles, a move that prompted weapons-related UN sanctions.

Last month's underground nuclear test earned the North further global censure and led the UN Security Council to slap another round of financial, trade and military sanctions on Pyongyang.

US President George W. Bush led international praise of this week's diplomatic breakthrough, saying he was "very pleased with the progress made".

North Korea's Asian neighbours, while welcoming the news, were more circumspect.

Japanese Prime Minister Shinzo Abe said Japan would keep up its tough sanctions against North Korea -- which include a ban on all imports from the country.

"Japan imposed sanctions because (North Korea) has not made a sincere response to the issue of its missile launch, nuclear test and abductions (of Japanese civilians)," Abe told reporters.

South Korean President Roh Moo-Hyun, under fire at home for his "sunshine" policy of engagement with the North, signalled he would pursue the policy by appointing close allies to handle foreign affairs and relations with Pyongyang.

The new South Korean UN Secretary General Ban Ki-Moon, in Russia for talks with President Vladimir Putin, called on North Korea to let UN nuclear inspectors back into the country and halt activities linked to weapons tests.

He also said the United States and Japan must prepare for the "normalization of relations with North Korea" if Pyongyang meets these demands.

The European Union also hailed North Korea's decision. A statement by the Finnish presidency of the bloc stressed its backing for peaceful efforts to resolve "security issues" with North Korea.

Officials in Seoul said the talks on ending the North's nuclear programs would likely resume after a series of bilateral meetings among the key players on the sidelines of an Asia-Pacific summit in Vietnam on November 18-19.

earlier related report
UN chief says US, Japan must prepare 'normalization' with N Korea
Moscow (AFP) Nov 1 - The incoming UN chief called Wednesday on North Korea to renounce nuclear weapons and said the United States and Japan should prepare for relations with Pyongyang if it did so, Russian news agencies said. Speaking to Russian reporters following talks with President Vladimir Putin, the newly-designated UN secretary general, South Korean Foreign Minister Ban Ki-Moon, said Pyongyang must forego nuclear weapons and readmit UN inspectors.

In response, North Korea should be given security guarantees and economic assistance while the United States and Japan should be ready to normalize relations with Pyongyang, RIA Novosti news agency quoted Ban as saying.

"The United States and Japan must prepare for the normalization of relations with North Korea" in response to measures that Pyongyang should take to allay fears over its nuclear weapons program, the agency quoted Ban as saying.

Those measures would include a renunciation of nuclear weapons, readmittance of International Atomic Energy Agency (IAEA) nuclear inspectors and a freeze of all its nuclear facilities including a five-megawatt reactor, the report said.

Ban said he hoped an anticipated resumption of six-party negotiations on North Korea's nuclear program would result in implementation of an agreement announced last year under which Pyongyang agreed to shut the program down.

"We support the denuclearization of the Korean peninsula," Interfax news agency quoted Ban as saying after his meeting with Putin and prior to talks with Russian Foreign Minister Sergei Lavrov.

North Korean leader Kim Jong-Il has long been reported to be seeking security guarantees from, and a normalization of relations with, the United States and its allies in northeast Asia.

But although both sides have in recent years explored ways to ease tensions -- former US secretary of state Madeleine Albright visited Pyongyang in 2000 -- those forays have yielded little obvious progress.

Rejecting appeals for it to suspend its nuclear programs, North Korea expelled IAEA inspectors in late 2002 and withdrew from the Nuclear non-Proliferation Treaty in January 2003.

Last month, the United Nations approved a package of sanctions on North Korea days after it stunned the world by testing a nuclear bomb.

Shortly thereafter, US Secretary of State Condoleezza Rice made a whirlwind tour through northeast Asia, urging China, Japan and South Korea to enforce those international sanctions in the strictest terms.

The United States announced in Beijing on Tuesday following a secret meeting with North Korean and Chinese officials that Pyongyang had agreed to return to the six-party negoatiations on its nuclear program.

The other three countries involved in the negotiations are: Japan, Russia and South Korea.

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