BEIJING - The chief US envoy at North Korean nuclear talks warned Sunday that shutting down DPRK's atomic program remains a far-off goal, but welcomed the country's decision to invite inspectors.

A giant North Korean flag flutters on the top of a 160-meter (533-foot) tower near the inter-Korean industrial park of Kaesong, North Korea, near the truce village of Panmunjom in the demilitarized zone (DMZ) that separates the two Koreas since the Korean War Saturday, June 16, 2007. [AP]

The US official, Christopher Hill, said he hopes inspectors from the UN nuclear watchdog can go to North Korea soon after the apparent resolution of a dispute over millions in frozen funds that had stalled disarmament.

North Korea on Saturday invited International Atomic Energy Agency inspectors to visit as the transfer of the money to its accounts neared completion. In Vienna, IAEA spokeswoman Melissa Fleming said the invitation had been received and that the "next steps" would be discussed Monday.

"Obviously, it is a welcome step. It's got to be followed by a number of other steps," said Hill, speaking to reporters on a trip to the Mongolian capital of Ulan Bator. "Everyone has a lot of work to do in the days and weeks ahead."

Hill is set to fly to Beijing on Monday to discuss a date for the next round of six-party talks. He has said they are likely in early July.

He said he expects the IAEA delegation to leave soon for North Korea: "I think they have been hoping to get this call."

North Korea said a "working-level delegation" from the UN nuclear watchdog had been invited to discuss procedures for the verification and monitoring of the Yongbyon reactor's shutdown. North Korea expelled IAEA inspectors in December 2002.

Hill said the participants in the talks - the US, China, Russia, Japan and the two Koreas - should now move to fully implement a February agreement and the eventual denuclearization of the Korean peninsula.

North Korea had refused to move on its February pledge to shut down the Yongbyon reactor until it received $25 million in funds that were frozen in a Macau bank. The US accused Banco Delta Asia of helping North Korea's government pass fake $100 bills and launder money from weapons sales.

Claiming the financial freeze was a sign of Washington's hostility, North Korea boycotted the six-nation talks for more than a year, during which it conducted its first-ever atomic bomb test last October.

South Korea welcomed the latest developments, but also said it was too early to celebrate.

"This is good news ... (but) this is not the time to get excited," South Korean chief nuclear envoy, Chun Yung-woo, told The Associated Press.

South Korea plans to start shipping 50,000 tons of heavy fuel oil to North Korea by the time its nuclear reactor is shut down, said Chun.

The North is to eventually receive further energy or other aid equivalent to 950,000 tons of heavy fuel oil in return for irreversibly disabling the reactor and declaring all nuclear programs.

"North Korea may bring up another issue to stall the progress like it has done before," Japanese Foreign Minister Taro Aso cautioned. "We should not swing between elation and desperation until the disarmament is fully achieved."