The talks started just after 10:00 am (0800 GMT) and were expected to last for two days, the US mission in Geneva said in a statement. The US delegation had nine participants while the North Koreans numbered eight.

Speaking after the first session, Washington's top negotiator Christopher Hill said the two sides had reached a "substantial understanding" on what steps need to be taken in order to resolve the issue.

For his part, chief North Korean negotiator Kim Kye-gwan said the talks had gone well.

"I expect this meeting will have a fruitful result," he told journalists on returning to his hotel after talks at the US mission in Geneva.

US officials said that the talks will continue over dinner and then a further session at the North Korean mission on Sunday.

"We do have a long way to go on many of these issues but I think we reached a substantial understanding between the two of us on what needs to be accomplished in the months ahead," Hill told reporters.

He said the next stage of talks will focus on the North Koreans declaring and disabling their nuclear program, while the US will focus on providing fuel oil and other economic and energy assistance.

"This next stage ... is of course a very critical stage but I think we have an understanding on the way forward," Hill said.

This understanding should pave the way for a successful round of six-party talks between all the countries engaged on the North Korean nuclear issue -- the two Koreas, the US, China, Russia and Japan -- in Beijing later this month, he added.

North Korea has already shut down a key nuclear reactor at Yongbyon under an agreement reached on February 13.

Under the deal, North Korea agreed to dismantle its nuclear programme in return for aid and security and diplomatic guarantees, notably normalising ties with the US.

Hill said he expected the next plenary session of six-party talks to result in a "February-style agreement" aimed at having a much more detailed implementation plan on disablement.

The two sides also discussed the issue of Japanese civilians who were kidnapped by North Korea in the 1970s and 1980s.

North Korea admitted in 2002 that it abducted 13 Japanese in the 1970s and 1980s to train its own spies. It returned five abductees and their families, but Japan says more victims are alive and unaccounted for.

The "abduction" issue has great emotional resonance in Japan, and Hill said he had stressed the importance the United States places upon a successful resolution as part of any comprehensive settlement.

"The importance that I attach to progress on the DPRK (North Korea)-Japan relationship, the importance that my government attaches to progress and to a positive atmosphere was well understood" by the North Koreans during Saturday's talks, he said.

US President George W. Bush notoriously included North Korea in the "Axis of Evil" along with Iran and Iraq -- then still ruled by Saddam Hussein -- in his State of the Union address in 2002, but Washington has subsequently shown itself much more willing to negotiate with the isolationist regime of Kim Jong-Il.

In contrast to the intransigence and tough talk on Iran's nuclear program, Bush said earlier this week that he was optimistic the North Korean issue can be solved before he leaves office in 2009.

"The question is, can it happen before I'm through? Yes, it can. I hope so," he told several non-US media outlets on Friday.

earlier related report
NKorea agrees to end all nuclear work by end-2007: US
North Korea has agreed to make a full declaration of all its nuclear programmes and to disable them by the end of the year, the chief US negotiator said on Sunday following talks here.

"One thing that we agreed on is that the DPRK (North Korea) will provide a full declaration of all of their nuclear programmes and will disable their nuclear programs by the end of this year, 2007," Christopher Hill told journalists after two days of talks in Geneva.

North Korea has already shut down a key nuclear reactor at Yongbyon under an agreement reached on February 13.

Under the deal, North Korea agreed to dismantle its nuclear programme in return for aid and security and diplomatic guarantees, notably normalising ties with the United States.

The US suspects the North, which conducted its first atomic weapons test in October, of running a secretive highly enriched uranium programme in addition to the programmes it has already admitted to.

When asked whether the declaration would have to include the suspension of all uranium activities to be satisfactory to Washington, Hill replied: "Full means full."

He stressed that talks would continue under the six-party framework that has addressed the issue of the secretive communist state's nuclear programme, with the next plenary session expected in Beijing later this month.

"Of course we will have to work out some of the details of this in the six-party process... but we had a very good understanding of this today and an understanding that we need to pick up the pace and get through this phase in 2007."

The two Koreas, the US, China, Japan and Russia are all involved in the multilateral process.

Hill said the ultimate aim was not just declarations and disabling of facilities but the full denuclearisation of the Korean peninsula and the forging of closer regional ties.

"We're in this for an even broader purpose which is to help create the sense of neighbourhood and bring all the countries together" as part of a North East Asian peace and security framework, which is scheduled to be the focus of further discussions in 2008, he said.

"The six-party process offers them (the North Koreans) some benefits that they don't have now because of these very much misguided nuclear programs," he added.

One such benefit is being removed from Washington's list of countries that sponsor "terror."

Hill said only that the two sides had held "good discussions" on this issue, and did not divulge any information on when such a delisting could come within the overall framework of negotiations.

Amid other bilateral talks, Japan and North Korea will meet face-to-face in the Mongolian capital Ulan Bator next week.

The countries' relationship is strained not only because of Pyongyang's nuclear activities but also due to North Korea's kidnapping of Japanese civilians during the 1970s and 80s.

North Korea has acknowledged kidnapping 13 Japanese to train its spies. It returned five victims and their families, and says the rest are dead.

Hill emphasised on Saturday that the "abduction" issue was also of great importance to the United States.

"The importance that I attach to progress on the DPRK (North Korea)-Japan relationship, the importance that my government attaches to progress and to a positive atmosphere was well understood" by the North Koreans, he said.

US President George W. Bush notoriously included North Korea in the "Axis of Evil" along with Iran and Iraq in his State of the Union address in 2002, but Washington has subsequently shown itself much more willing to negotiate with the isolationist regime of Kim Jong-Il.