U.S. Assistant Secretary of State Christopher Hill speaks to the media in the Mongolian capital of Ulan Bator June 16, 2007. North Korean funds that had been frozen in a Macau bank account for nearly two years will soon reach Pyongyang and that should spur inspections of the North's nuclear sites, Hill said. [Reuters]

SEOUL, South Korea -- North Korea sent a letter to the United Nations nuclear watchdog Saturday, inviting inspectors to the country to discuss shutting down its main nuclear reactor, state media reported.

The letter to the International Atomic Energy Agency noted "that a working-level delegation of the IAEA has been invited to visit (North Korea) as it is confirmed that the process of de-freezing the funds of (North Korea) at the Banco Delta Asia in Macau has reached its final phase," the North's Korean Central News Agency reported.

Ayhan Evrensel, a spokesman for the IAEA in Vienna, said the agency had not received a letter from North Korea. He declined comment further.

The inspectors were invited for "discussions of the procedures of the IAEA's verification and monitoring of" shutting down its Yongbyon reactor, the report said.

North Korea had refused to act on its February pledge to disarm until it got access to $25 million once frozen in a US-blacklisted 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 international nuclear talks for more than a year, during which it conducted its first-ever atomic bomb test in October.

In an attempt to win North Korea's promise to start dismantling its nuclear program, the US agreed earlier this year to give its blessing for the money to be freed.

The US, Japan, China, Russia and the two Koreas took part in the arms negotiations that prompted the February pledge from the North to stop making nuclear weapons in exchange for aid and political concessions.

South Korea's chief nuclear envoy, Chun Yung-woo, welcomed the North Korean announcement as "good news."

"As we watch how the discussions between North Korea and the IAEA proceed, we will start preparations for implementing our own obligations as outlined by the Feb. 13 agreement," Chun told The Associated Press.

Chun was referring to the shipment of 50,000 tons of heavy fuel oil the North Korea is to receive in return for shutting down its reactor and allowing U.N. inspectors back into the country to verify the closure and seal the facility. North Korea expelled IAEA inspectors in December 2002.

Signs of a breakthrough in the standoff emerged this week as the North Korean funds at the Macau bank finally began to be transferred.

US nuclear envoy Christopher Hill said earlier Saturday that a technical glitch was holding up the final transfer, but that the issue would likely be resolved soon.

"I heard that the money was transferred, it's in Russia, and they're having some technical problems in getting it to the bank where the actual North Korean accounts are," Hill told reporters at an Asia Society conference in Mongolia.

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