North Korea may be preparing to shut its main nuclear reactor, according to media reports from the South.

Satellite images have detected unusual activity at the Yongbyon base, reports in the Dong-a Ilbo newspaper and Yonhap news agency say.

While the reason for this activity is still unclear, the reports raise hope that North Korea still intends to comply with an international deal.

Pyongyang has already missed the first deadline agreed as part of the deal.

It was meant to have "shut down and sealed" its Yongbyon reactor by Saturday - 60 days after the deal was reached.

But complications over North Korean funds, frozen in a Macau bank, delayed proceedings.

The North linked progress on the agreement to the return of the money, refusing to move forward with shutting down the reactor until it had access to the $25m (£13m).

After weeks of delay, the US said recently that the money was now available to be picked up, but there has been no confirmation of this from Pyongyang, and the funds are currently still in Macau's Banco Delta Asia.

Saturday's deadline came and went with no official comment from the North.

Its dialogue partners - the US, China, Russia, South Korea and Japan - appear to be giving North Korea a few more days to comply.

Rice aid

Since the weekend's deadline has passed, there has been huge pressure on the North to start the process of shutting down its Yongbyon reactor as soon as possible.

South Korean Foreign Minister Song Min-soon spoke by telephone with his US counterpart, Condoleezza Rice, on Tuesday and the two "strongly expressed expectations that North Korea will soon implement disarmament measures," the South's Foreign Ministry said in a statement.

South Korean media has also reported that Seoul is thinking of delaying the resumption of rice aid to its impoverished neighbor, until the North takes concrete steps forward.

The two Koreas were set to begin talks on Wednesday to discuss the North's request for 400,000 tones of rice.

But there are signs of hope, according to reports in Tuesday's South Korean media.

Officials from both Seoul and Washington have been closely monitoring activity at Yongbyon - and they have begun to notice changes.

An unnamed intelligence official told Yonhap that the reactor was still operating, but there were some more intense signs of activity than usual.

"We are tracing and analyzing them," the official said, requesting anonymity.

Some diplomatic officials were noncommittal about what these signs meant, but another un-named source is quoted as telling the Dong-A Ilbo: "Washington thinks it is highly likely that those activities are a part of North Korea's operations to close down the nuclear facility."

Meanwhile the Macau bank involved in the funding dispute has challenged a US Treasury ruling that bars US banks from doing business with it.

Banco Delta Asia said the ruling ignored all remedial measures it has taken, and "was politically motivated because it was based on disputes between the United States and North Korea".

Last month, the US blacklisted the bank, calling it a "willing pawn" in North Korea's illegal activities.

Photo caption

Satellite view of North Korea nuclear reactor at Yongbyon – file photo 2002