But it's still unclear whether it will do so, despite a week of intense diplomatic efforts to revive the six-nation talks which the North last April described as "dead".

The communist state's economy has been generally ailing since the loss of aid following the Soviet Union's collapse. A famine in the 1990s killed hundreds of thousands.

The nuclear standoff has worsened its plight, as has an apparently failed attempt by the regime to clamp down on a nascent free-market economy.

Leader Kim Jong-Il has himself acknowledged his people's hardships.

"I'm the most heartbroken by the fact that our people are still living on corn," Kim was quoted as saying by state media this month.

"What I must do now is to feed them white rice, bread and noodles generously."

South Korea estimates the North will run short of 1.29 million tons of grain this year, equivalent to almost four months' supply.

South Korea supplied an annual 300,000 tons of fertiliser until relations soured over the North's nuclear ambitions. Pyongyang has spurned Seoul's offer of a "Grand Bargain" -- massive economic aid in return for full denuclearisation.

In recent years the regime tried to reassert state control over the economy by restricting private markets, which sprang up after the state food distribution system collapsed in the famine years.

Last November it decreed a currency revaluation to flush out private wealth. Analysts said the move backfired disastrously, intensifying food shortages and fuelling inflation.

Elderly Pyongyang residents who cannot afford to heat freezing apartments are gathering in warmer subway stations during the daytime, according to Seoul welfare group Good Friends.

Premier Kim Yong-Il, who oversees the economy under leader Kim, has made an apology for the bungled revaluation, the group said this week.

And the North is relaxing some curbs on markets because of mounting public anger, South Korea's spy agency has said.

Chang Yong-Seok, research director at Seoul's Institute for Peace Affairs, said the reported apology may have been exaggerated. But the premier had admitted he was at fault, as he had done before.

The North quit six-party talks last April and staged a second atomic weapons test the following month.

Its nuclear negotiators were this week meeting their Chinese counterparts in Beijing, but reportedly were refusing to drop two preconditions for returning to dialogue.

The North wants a lifting of United Nations sanctions, which have hit its lucrative weapons exports. And it seeks a US commitment to hold talks about a peace treaty formally ending the 1950-53 war.

The United States, Japan and South Korea -- the other six-party members, along with host China and Russia -- insist it return to dialogue before any concessions.

However Kim Yong-Hyun of Seoul's Dongguk University forecast a compromise which would see the six-party talks resume next month.

The North, he told AFP, would try to reach agreement because its worsening economy "means they need outside assistance as soon as possible".

Chang said narrowing the gap between the US and North Korean positions would be difficult. He foresaw talks sometime this year.

Given its powerful military, the North would not back down easily on nuclear issues.

"However, since they (military) know the devastating (economic) situation, it will play a big role in making North Korea make partial concessions."

The talks began in 2003. Even if they resume, some analysts believe they could drag on for years.

The North has vowed to become a "great, powerful and prosperous" nation by 2012, 100th anniversary of the birth of founder Kim Il-Sung.

"I think at least until 2012, it will be extremely difficult for North Korea to give up its nuclear technology and tools," Chang said.

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