"This is a very significant visit against the backdrop of major changes in the situation on the Korean peninsula," spokesman Liu Jianchao said.

The encounter between the Chinese envoy and Kim is thought to be the North Korean leader's first announced meeting with any foreigner since Pyongyang shocked the world with its October 9 test of a nuclear weapon.

China, North Korea's closest ally and by some way its largest aid donor and trade partner, is seen as critical to ensuring United Nations sanctions imposed after the test are made to bite.

Rice expressed hope that the Chinese envoy would convince the North Koreans to disarm and return to negotiations.

But her senior aide said "no breakthrough" was expected to be announced.

"Our understanding is the North Koreans have not been in a mood to return to the talks and if anything the North Koreans are looking to escalate the crisis further," the official said.

A senior US official travelling with Rice earlier said the Chinese delegation would likely send a "very strong" warning against further nuclear tests.

Rice warned of "grave consequences" if the Stalinist regime conducted a second test while also stressing that the door to negotiations remained open.

The top US diplomat arrived in Seoul from Tokyo on Thursday on a four-nation tour aimed and bolstering allies' resolve to enforce the sanctions against North Korea embodied in UN Security Council resolution 1718.

South Korea promised Rice it would carry out a "full scale" review of its economic ties with the North in light of the UN sanctions, a senior US official said.

President Roh Moo-Hyun and Foreign Minister Ban Ki-Moon told Rice they would bring their government's "sunshine" policy of engagement with the North into line with the UN measures, the official said.

While details of specific projects in the North were not discussed, the Koreans said they were "engaged in a full-scale evaluation of the entire range of North-South relations".

"They are looking at all of the aspects of their relationship and will be announcing how they will comply with 1718 in the very near future," he said on condition of anonymity.

The resolution calls on North Korea to return to negotiations over its nuclear programme and imposes a range of financial, trade and military restrictions.

While Japan assured Rice in meetings on Wednesday that it fully supported the sanctions, South Korea and China have baulked at taking measures that could cause the collapse of their impoverished neighbour.

Rice, who earlier held talks in Japan, travels on to China on Friday and then Russia on Saturday as part of the US drive to tighten the pressure on Kim's isolated regime.

During her talks here, Rice sought to ease Seoul's concern that sanctions, notably the inspection of cargo to and from the North, could lead to conflict with Pyongyang, which has branded the measures a declaration of war.

"The US has no desire to do anything to escalate tensions," she said at a joint press conference after talks with Foreign Minister Ban, who is also the incoming head of the United Nations.

"We want to leave open the path of negotiation," Rice said. "We don't want the situation to escalate."

But she and Ban warned of "grave consequences" if the North carried out a threat to stage a repeat test.

"We agreed that it would aggravate the current situation and that it should never take place," Ban said. "We agreed that in case it happens, there should be more grave consequences."

Rice and Ban later went into three-way talks with Japanese Foreign Minister Taro Aso.

North Korea has boycotted six-nation disarmament talks -- involving China, Japan, Russia, the United States and the two Koreas -- since last year after Washington took action to lock it out of the international banking system.

earlier related report
China envoy holds talks with Kim Jong-Il in Pyongyang
Beijing (AFP) Oct 19 - Chinese President Hu Jintao's special envoy delivered an important message Thursday to North Korean leader Kim Jong-Il as part of a "significant" mission to Pyongyang, the foreign ministry said.

Tang Jiaxuan, leading a delegation of senior Chinese government officials that arrived in the North Korean capital on Wednesday, was carrying a "message from President Hu Jintao," spokesman Liu Jianchao told reporters.

Liu described the visit as extremely important in trying to resolve the crisis triggered by North Korea's October 9 atomic test.

"This is a very significant visit against the backdrop of major changes in the situation on the Korean peninsula," Liu said.

The meeting was the first confirmed face-to-face contact between a Chinese official and the North Korean leader since the nuclear test, and was thought to be the first time Kim had met any foreigner since then.

As China is the North's closest ally and biggest trade partner, the United States and other nations have consistently urged Beijing to use its influence with Pyongyang to curtail Kim's nuclear ambitions.

Two vice foreign ministers -- Wu Dawei, who is also China's top negotiatior to the stalled six-party talks on North Korea's nuclear program, and Dai Bingguo -- were part of the delegation, Liu said.

A senior US official said earlier that the Chinese delegation was expected to warn North Korea against conducting any more nuclear tests and to reinforce the message from Saturday's UN Security Council sanctions.

"I'm pretty convinced the Chinese would have a very strong message about future tests," a State Department official accompanying US Secretary of State Condoleezza Rice said in Seoul.

Tang, a member of the State Council, or cabinet, and former foreign minister, last week met US President George W. Bush in Washington and also visited Moscow.

The UN resolution, unanimously approved by the Security Council, calls on North Korea to return to negotiations on its nuclear program and imposes sanctions on the impoverished state for its atomic test.

The resolution bans trade with North Korea related to its development of nuclear arms, ballistic missiles and other weapons of mass destruction, and imposes financial controls to starve the North Korean military of funds.

The most controversial measure calls for the inspection of cargo to and from North Korea, aimed at preventing its cash-strapped government selling material for an atomic bomb or other illicit weapons to terrorists.

China has given mixed signals about how closely it intends to inspect North Korean cargo, although spokesman Liu insisted Thursday his nation would abide by all aspects of the UN resolution.

"We believe the resolution is a balanced one... China will faithfully implement the entire content of resolution 1718," he said.

However he cautioned that China did not want to see more measures taken to punish North Korea.

"The parties, when implementing it (the resolution), should not try to expand the sanctions," he said.

"What is important at this moment is that sanctions are not in themselves the end but rather the means to the end, which is to solve the nuclear issue on the Korean peninsula in a peaceful way through dialogue."

Liu said China remained hopeful the six-party talks on North Korea's nuclear program would resume.

North Korea has refused to attend the talks -- which China hosts and also involve Japan, the United States, South Korea and Russia -- since November of last year.

Japan said earlier Thursday that efforts were underway to arrange a meeting of foreign ministers from the five nations aside from North Korea, although Liu refused to comment on that.

Rice, who arrived in Seoul as part of a four-nation tour to try to shore up enforcement of the sanctions, is due to arrive in Beijing on Friday.

Liu said the controversial parts of the UN resolution, such as the cargo inspections, would be discussed during Rice's visit.

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