PYONGYANG, North Korea - A US delegation pressed North Korea on Monday to shut down its main nuclear reactor and allow in UN inspectors even as the top American negotiator said it would be difficult for a weekend deadline on the closure to be met.

New Mexico Governor Bill Richardson seen in Washington in this March 28, 2007 file photo. [AP]

The American delegation said North Korea's top nuclear negotiator, Kim Kye Gwan, told them his government would allow UN nuclear inspectors into the country as soon as $25 million in disputed North Korean funds are released.

Kim, who is also vice foreign minister, met with New Mexico Gov. Bill Richardson, a Democratic presidential candidate, and Anthony Principi, President Bush's former veteran affairs secretary, who were visiting the North Korean capital.

But Principi said Kim told the Americans that it would be difficult to shut down the nuclear reactor by a Saturday deadline called for in a Feb. 13 nuclear disarmament accord. Under that agreement, the North must shut down and seal the Yongbyon nuclear reactor and a reprocessing facility in exchange for an initial shipment of aid.

The International Atomic Energy Agency is slated to monitor and verify the shutdown in what would be its first visit since late 2002, when North Korea expelled IAEA inspectors after US officials accused the nation of running a secret uranium enrichment program in violation of a 1994 disarmament deal.

"They can make a beginning, but whether they can completely shut down a nuclear reactor in such a short time would be very difficult," Principi said.

The North agreed to shut the reactor only after the US promised to resolve the key financial issue within 30 days - which Washington failed to do because the fund transfer has been mired in technical complications.

Kim "indicated that the North Korean government would invite the ... inspectors back the moment the funds are released to the North Korean government," Principi told reporters.

"They believe that it's critical that the $25 million be returned to their government," he said.

In Tokyo, US nuclear envoy Christopher Hill said the deadline was going to be difficult to meet because of the ongoing dispute over the frozen funds.

"Clearly, we're aiming for the complete implementation of the February agreement by day 60 ... but that timeline is becoming difficult," said Hill, who is in Japan to discuss the next stage of the nuclear talks.

He said resolving the financial dispute in the "next day or two" will be key in order for the North to meet the reactor shut down deadline.

"We feel this should never have held up the nuclear process, but unfortunately it has," Hill said. "We have some ideas for how to go forward, and we'll see if we can do that in the next couple of days."

The US envoy also said Washington would push the North to fully meet its obligations. "There's no such thing as partial implementation" of the agreement, Hill said.

The only immediate cost the impoverished North would suffer for not shutting down the reactor by the deadline would be an initial 50,000 ton shipment of heavy fuel oil promised as a reward. That shipment was part of 1 million tons of oil it would get for dismantling its nuclear programs.

The money dispute has held up progress in implementing the landmark agreement in which North Korea promised to take initial steps toward dismantling its nuclear program, including closing its main nuclear reactor, in exchange for economic aid and political concessions.

State Department spokesman Sean McCormack declined to comment on what might happen if North Korea misses the deadline, but said the United States continued to believe that all parties to the agreement are "working in good faith to meet it."

But, he told reporters the money issue "was more complicated than anyone could have imagined," and suggested Washington might not object to an extension of the deadline.

"We'll take a look at where we are on Saturday," McCormack said.

On Tuesday, Japan's Cabinet approved a six-month extension on trade sanctions against North Korea, which were imposed in the wake of the state's nuclear test last year, Cabinet Office spokeswoman Miwako Fujishige said. The measures include closing ports to North Korean ships and banning the import of North Korean goods.

North Korea has refused to move forward because of the delayed transfer of the money frozen by Macau authorities after the US blacklisted a bank in the Chinese-administered region in 2005 for allegedly helping Pyongyang launder money.

The delegation, which also includes Victor Cha, Bush's top adviser on North Korea, is on a four-day trip to Pyongyang to recover remains of US servicemen killed in the Korean War.

Richardson said his delegation pushed Kim for a show of good faith that North Korea was ready to meet its obligations under the February deal, asking for a meeting of the six nations involved in the nuclear disarmament talks before the deadline.

He said he was hoping to travel to the reactor site in Yongbyon, 55 miles north of Pyongyang, but there were a lot of "political issues involved." He did not elaborate.

In the first minutes of the meeting between the North Koreans and the Americans, which reporters were allowed to watch before being escorted out, Kim said the visit, the first that included both Democratic and Republican officials since Bush took office, was of "very great significance."

Kim and the Americans met at the Foreign Ministry building, which overlooks Kim Il Sung square. Hundreds of children and women in brightly colored traditional Korean dresses practiced dances that they will perform on Sunday, when North Koreans celebrate the 95th anniversary of the birth of Kim Il Sung, the country's founding president and the father of current leader Kim Jong Il.

Richardson and Principi also visited the USS Pueblo, the only active-duty US warship in the hands of a foreign power. A North Korean official called the vessel a living example of continued US aggression toward his country.

Richardson, a former ambassador to the UN, has regularly made diplomatic trips, often on his own initiative, to global hot spots. Although visits to North Korea by senior US officials are rare, this was Richardson's sixth.

In a possible sign of improved ties, a North Korean general said the remains of six US servicemen would be handed over to the Americans. Three of the sets of remains had identification tags, US officials said after meeting with the general.

Richardson called it a noble humanitarian gesture that would bring comfort to American families.