Smoke was spotted recently at various places around the site in the country's northeast, a South Korean government source was quoted by Yonhap news agency as saying.

"We are closely watching to determine whether North Korea is working to repair the nuclear site," the source said, adding the smoke is believed to have come from the burning of clothes and equipment used during the repair work.

Other sources quoted by Yonhap said the North may be simulating activity to pressure the United States amid a deadlocked nuclear disarmament deal. They said the North is believed to have finished repairing the site after its first test on October 9, 2006.

South Korea's intelligence agency said it could not confirm the activity at the site at Punggye-ri in Gilju country of North Hamkyong province.

The report came as US nuclear envoy Christopher Hill arrived in the North to try to salvage the crumbling disarmament deal.

North Korea's first underground nuclear test sparked international alarm and United Nations sanctions. But weeks later the North rejoined disarmament talks.

Those negotiations are now falling apart because the North refuses to accept US-led demands for thorough inspections of its nuclear facilities.

The North last week announced it would begin restarting its plutonium reprocessing plant at Yongbyon, located 100 kilometres (60 miles) north of Pyongyang.

It shut down Yongbyon in July 2007 and began disabling it in November. In return, Pyongyang was to receive one million tons of fuel oil or equivalent energy aid and Washington was to remove it from the terror blacklist.

However, Washington refuses to act on the delisting until the North accepts the procedures for outside verification of a nuclear declaration which it submitted in June.

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