Reuters- - North Korea agreed on Tuesday to return to six-party talks on dismantling its atomic weapons just weeks after staging its first nuclear test, and a U.S. envoy said he wanted to see "substantial progress" after a year-long hiatus.

Envoys from North Korea, the United States and China met in Beijing and agreed to resume the talks in the near future, the Chinese Foreign Ministry said on its Web site.

After the breakthrough meeting, U.S. Assistant Secretary of State Christopher Hill told a Beijing news conference that he expected "rapid progress" from the next talks, possibly in November or December, but acknowledged that fully settling the nuclear standoff was likely to be painstaking.
We are a long way from our goal still," he said. "I have not broken out the cigars and champagne quite yet."

The other three countries involved in the talks are South Korea, Japan and Russia. A fifth round of talks in Beijing broke off last November without progress and North Korea later protested over a U.S. crackdown on its international finances.

Hill spelled out a contentious bundle of issues that would preoccupy negotiators and could again derail discussions, including the U.S. financial restrictions, questions of how to ensure that North Korean kept any disarmament commitments, and the diplomatic damage done by Pyongyang's October 9 nuclear test.

North Korea made no explicit promise not to conduct any more tests, Hill said, adding that a U.N. Security Council resolution imposing sanctions on Pyongyang remained in force.

"I think it's self-evident they should not engage in such provocations," Hill said of further tests.
"ILLICIT ACTIVITIES"

The next six-party talks would address North Korea's concerns with the U.S. financial restrictions, possibly through a working group, he said, adding that Pyongyang needs to abandon "illicit activities" that the U.S. has said include currency counterfeiting and drug trafficking.

Washington announced steps to restrict North Korean access to international financial networks days after the six-party group reached broad agreement on September 19, 2005, toward negotiating an end to North Korea's nuclear weapons and drawing the country out of international isolation.

After North Korea carried out its nuclear test on October 9, the U.N. Security Council voted to impose financial and arms sanctions on Pyongyang.
Japan's top government spokesman, Yasuhisa Shiozaki, welcomed the decision to resume the multilateral talks, saying the six-party forum was the best framework to resolve the standoff, Kyodo news agency said.

One Japanese government official told Reuters: "We think this could be a step in a positive direction, but we still have some caution."

Earlier on Tuesday, before word of the talks resumption, Chinese Foreign Ministry spokesman Liu Jianchao said Beijing had no plans to sever aid to or trade with North Korea.

Liu denied that an apparent drop in China's oil exports to the isolated fortress state signaled a shift in policy.

Chinese trade data released on Monday indicated that in September China sent no crude to energy-famished North Korea.
STRAINED TIES

The North relies on China for nearly all its oil, but has strained long-standing ties first by test-firing missiles in July and then by testing a nuclear device -- both despite public pleas for restraint from China's leaders.

Beijing bluntly criticized the North's nuclear test and backed the sanctions.

"The confrontation (between the United States and North Korea) had reached a peak, but nobody could afford to have war," said Paik Hak-soon, head of North Korea studies at Seoul's Sejong Institute. "It doesn't mean there will be a resolution right away, but the crisis will probably go into a period of latency."
hi Yinhong, a professor of international relations at People's University in Beijing, said Pyongyang hoped to alleviate China's anger and prevent more serious sanctions.

But Shi was convinced North Korea has not changed its determination to possess and develop nuclear weapons.

"I don't think the chaos stemming from North Korea's nuclear test has been fundamentally erased," Shi said.