North Korea confirms it will return to the stalled six-party talks aimed at ending its nuclear program.

"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 U.S. within the framework of the six-party talks," said the KCNA news agency on Wednesday, citing a Foreign Ministry spokesman.

Representatives from China, North Korea and the United States reached the decision at an informal meeting in Beijing, the Chinese ministry says on its website.

U.S. Assistant Secretary of State Christopher Hill, the head of the American delegation, said talks could resume as soon as next month or December. But he added that all six nations must agree on a date.

The meeting represents the first signs of easing tensions since North Korea shocked the world by conducting an underground nuclear explosion on Oct. 9 despite warnings from the U.S., Japan, and its biggest ally, China.

"The three parties had a candid and in-depth exchange of views on continuing efforts to advance the process of the Six Party Talks. The three parties all agreed that the Six Party Talks be held soon at a time convenient to the six parties," says the Chinese ministry website.

Resumption in talks would mark a diplomatic victory for China. Beijing had been arguing against punishing North Korea too harshly in the wake of the test and was pushing for diplomacy instead of United Nations sanctions.

The talks stalled a year ago after North Korea pulled out in protest in response to sanctions.

The other three nations participating in the six-nation talks are South Korea, Russia and Japan. The talks began when North Korea withdrew from the Nuclear Non-Proliferation Treaty (NPT) in 2003.

U.S. President George Bush, meeting with reporters in the Oval Office, thanked China for its help.

"I am pleased and I want to thank the Chinese," Bush said.

Bush added that the agreement would not halt the U.S. efforts to enforce the U.N. Security Council resolution that imposed sanctions on North Korea's trade in military materials and luxury goods.

South Korea welcomed the news.

"The government hopes that the six-party talks will resume at an early date as agreed and that an agreement will be reached on how to implement" a prior agreement under which Pyongyang promised to abandon its nuclear program, South Korean Foreign Ministry spokesman Choo Kyu-ho told The Associated Press.

South Korea has been trying to strike a delicate balance between punishing its volatile northern neighbour and avoid pushing it too far.

The UN resolution called for a ban on the sale of arms to North Korea, and inspection of cargo entering and leaving the country. It also called for the freezing of assets of businesses supplying North Korea's nuclear and ballistic weapons programs, as well as restrictions on sales of luxury goods and travel bans on North Korean officials.

An about-face

Tuesday's apparent agreement follows weeks of harsh rhetoric from Pyongyang.

North Korea claimed that the U.S., "scared" by the nuclear test, conducted some 200 spy flights over the communist country during October.

"The ... aerial espionage underscores the need for the army and the people of the (North Korea) to bolster the war deterrent for self-defense in every way to foil the U.S. imperialists' moves for a war of aggression," the North's official Korean Central News Agency said.

North Korea also warned South Korea on Tuesday against participating in a U.S.-led international drive to stop and search ships carrying weapons of mass destruction, saying involvement would bring about unspecified "catastrophic consequences."

UN making broader plans

The news comes as UN nuclear chief Mohamed ElBaradei is urging countries to adopt a broad new plan for the use of atomic energy to address growing concerns about the spread of sensitive technology.

A new approach is essential because rising global demand for energy has made atomic power a more attractive option and proliferation threats remain a serious challenge, ElBaradei told the UN General Assembly on Monday in his annual report.

He cited North Korea's recent nuclear test, Iran's uranium enrichment program, and nuclear trafficking as examples of these threats.

ElBaradei reiterated his call for talks to resume with all concerned parties to the North Korea standoff. He also expressed hope that Iran and key European nations and others can ultimately engage in "long overdue" negotiations that resolve questions about Tehran's nuclear program and address its security concerns.

With files from The Associated Press