The United States and the Democratic People's Republic of Korea (DPRK) are near an agreement to save a crumbling nuclear deal, news reports said on Friday, while the Republic of Korea's (ROK) foreign minister said details of a compromise may soon be announced.

America's ABC news quoted senior US officials as saying the DPRK may be preparing for another nuclear test after it was seen moving cables and tunnelling at the site of its only previous test in October 2006.

Chosun Ilbo, a daily newspaper in the ROK on Friday quoted government sources as saying the DPRK and the United States were near an agreement on verifying Pyongyang's account of its nuclear program that would prompt Washington to remove it from a list of countries that sponsor terrorism.

The Washington Post reported on Thursday the Bush team looked set to provisionally remove Pyongyang from the State Department's terrorism list.

The ROK's foreign minister said Washington will soon make a decision that will hopefully lead to removing the DPRK from the State Department terrorism blacklist.

"If we stall at this point, it will be difficult to jump-start the process under the new US administration," Yu Myung-hwan said.

Yu indicated that Washington may be about to accept a compromise by focusing initial verification on Pyongyang's known nuclear facilities and leave to a later stage undeclared installations and a suspected uranium enrichment program.

The disarmament deal appeared to be in peril after Pyongyang, angry at not being removed from the list, vowed last month to rebuild its Yongbyon nuclear plant. Once removed from the list, the DPRK would see an end to many sanctions.

Japan to extend sanction

Japan has voiced its reservations about removing the Pyongyang from the list, feeling that it may not be an appropriate move to make without first resolving a long-simmering feud over its nationals kidnapped decades ago by the DPRK agents.

"We expect the United States to tell us before making a final decision and if we think that it is enough, or enough to some extent, to resolve the nuclear issue, then I think it would be fine," Foreign Minister Hirofumi Nakasone told a news conference.

He said he did not know if the United States would go ahead with delisting, but that he would not see it as a problem if it was deemed as yielding results.

Tokyo also said it would extend its sanctions on the DPRK, including a ban on imports, for another six months after they expire on Monday, because of a lack of progress on both the issues of denuclearization and abductees.

Missile test

US nuclear envoy Christopher Hill, who went to Pyongyang last week to save the disarmament-for-aid deal the DPRK struck with China, Japan, Russia, the ROK and the United States, has mostly been silent about his discussions.

The DPRK has reportedly deployed more than 10 short-range missiles on its west coast for a possible launch. On Tuesday, the DPRK fired two short-range missiles into the Yellow Sea, media reports said.

(Agencies via China Daily?October 11, 2008)