Powell and Paek spoke for 20 minutes on the margins of a regional security forum to go over proposals for ending North Korea's nuclear arms programs that were presented last week in multilateral talks in Beijing, the two sides said.

"The secretary emphasized the (US) administration's proposals to move forward on dismantlement of North Korean nuclear programs," State Department spokesman Richard Boucher said.

"The secretary said there was an opportunity for concrete progress," he said, characterizing the discussion as "useful to help clarify each side's proposals."

In a statement released shortly after Boucher spoke, the North Korean delegation said Paek had told Powell that the two countries need not be "permanent enemies" if the United States dropped its "hostile policy."

The message appeared conciliatory by North Korean standards, but reiterated Pyongyang's staunch position that it be rewarded for giving up its nuclear weapons and lamented that there was now "no trust between the DPRK and the US."

"If the United States is of the position to improve the bilateral relations, the DPRK (North Korea) also will not regard the US as a permanent enemy," Paek told Powell, according to the statement.

Paek also said that "simultaneous actions" -- US rewards for North Korean concessions -- were the only way to resolve the standoff that erupted two years ago when Washington claimed Pyongyang admitted to violating an earlier agreement to end its nuclear weapons programs.

"Particularly, he emphasized the importance of the United States making a commitment to renouncing its hostile policy on the DPRK and taking measures to reward directly by accepting the DPRK proposal on 'reward for freeze'," the statement said.

On Thursday, Powell said the United States was willing to match North Korea "deed for deed" in the short-term if it agrees to dismantle its atomic weapons and halt their development under the new US offer.

"We have to see deeds before we are prepared to put something on the table," he told reporters at a news conference on the eve of the annual ASEAN Regional Forum (ARF).

"We don't think this will take long, we don't think that what's been asked for would be very difficult to achieve," Powell said.

The new US plan, presented last week at the third round of so-called "six-party talks" between the United States, China, Japan, Russia and North and South Korea, gives North Korea three months to shut down and seal its nuclear weapons facilities in return for economic and diplomatic rewards.

Further incentives would be offered afterwards when North Korea verifiably and permanently dismantled those facilities.

Although North Korea rejected the US proposal, participants in the six-party talks noted flexibility and agreed to meet again by the end of September.

"We are anxious to see the North Koreans move together with us," Powell said on Thursday.

Powell and Paek met briefly on the sidelines of the July 2002 ARF in Brunei in what was the last face-to-face, cabinet-level contact between the two countries.

The crisis erupted three months later and deepened when North Korea pulled out of the nuclear Non-Proliferation Treaty in early 2003.

Since then, the United States had demanded that North Korea totally dismantle its atomic weapons programmes in a verifiable manner and refused to offer concessions until that was done.

But at the Beijing talks last week, that insistence was toned down slightly in a bid to cement a consensus among the six parties negotiating the matter.

"We showed flexibility in our position last week because we wanted our colleagues in the six-party talks to recognize the United States was seeking a peaceful, diplomatic solution," he said.

The plan was the first significant overture to Pyongyang since US President George W. Bush took office in early 2001 and branded the North part of an "axis of evil" alongside Iran and pre-war Iraq.

Bush, who is up for re-election this year, had been strongly criticized by presumptive Democratic presidential candidate John Kerry for his hardline stance on North Korea.

Kerry has vowed to talk directly with North Korean leader Kim Jong-Il to end the crisis and suggested he might be willing to offer further concessions to Pyongyang.

WAR.WIRE