North Korea: There were signs of progress in talks yesterday in Beijing to resolve the nuclear stand-off on the Korean peninsula, as North Korea signalled it may take initial steps towards curbing its atomic ambitions.
Negotiations on easing nuclear tension in north Asia are knotty and fraught, with the demands of six countries - North Korea and South Korea, Russia, Japan, the US and China - all vying for attention. The stakes in the negotiations, held at a secluded Beijing guesthouse reserved for senior Communist Party figures, have been raised by North Korea's test explosion of a nuclear weapon in October.
Western diplomats are sceptical about any major breakthrough in this round, although they are conceding there could be "significant progress".
Having been proven wrong so many times by the unpredictable North Koreans, no one is willing to forecast the outcome.
As host of the round-table discussions and as the country with the best relations with North Korea and the other parties, China is expected to play a crucial role in any agreement.
Earlier in the day US chief negotiator Chris Hill was forced to deny a Japanese report that a deal was made already - even before the North Koreans were seen in Beijing.
However, the upbeat tone remained. Japanese news agency Kyodo reported that Chinese diplomats had drawn up a draft deal for presentation late last night or early today, quoting South Korea's top envoy and deputy foreign minister Chun Yung Woo. He said North Korea did not mention US financial sanctions during the talks yesterday.
These are said to be a major sticking point - North Korea abandoned a hard- won agreement in 2005 after Washington imposed financial restrictions on a small private bank in Macao, accusing it of laundering North Korean funds.
The 2005 statement is widely expected to form the basis of any possible agreement. It offered the North economic and security concessions in return for abandoning its nuclear weapons capabilities.
Kim Kye Gwan, the North Korean delegate at the talks, said he was ready to discuss the preliminary steps toward fulfilling Pyongyang's commitment to give up its nuclear weapons in exchange for benefits outlined in the September 2005 agreement.
"We are ready to discuss the initial-phase measures . . . I am neither optimistic nor pessimistic," he said on arrival at Beijing. "We will make decisions while assessing whether the US will abandon its hostile policy and move toward peaceful coexistence."
The Chinese spin was also positive, with deputy foreign minister Wu Dawei saying the talks were aimed at "implementing the joint statement" of 2005, which would be a significant advance in itself.
North Korea is reportedly seeking more than 500,000 tonnes of fuel oil a year and other benefits in exchange for taking preliminary denuclearisation steps.
There have been various reports in the run-up to the talks that Washington and Pyongyang may have already signed a memorandum of understanding during a meeting in Berlin, although the US has denied this.