SEOUL, South Korea - North Korea indicated it was ready to promptly shut down a plutonium-producing reactor, a U.S. envoy said Friday, the latest sign the communist country may live up to its pledge to stop making nuclear weapons.

Still, Assistant Secretary of States Christopher Hill, returning from a surprise two-day trip to North Korea, cautioned that completely disarming the communist country would be a long and arduous process.

Hill said he was "buoyed by a sense that we are going to be able to achieve our full objectives, that is complete denuclearization, but also burdened by the realization of the fact that we're going to have to spend a great deal of time, a great deal of effort, a lot of work in achieving these."

Hill met with North Korea's chief nuclear negotiator and foreign minister during the first trip by a high-ranking U.S. official to the country since October 2002.

Last week, the secretive state invited inspectors from the International Atomic Energy Agency to begin discussions on the procedures for shutting down its Yongbyon reactor. The country expelled the UN nuclear inspectors in late 2002.

North Korea "indicated that they are prepared promptly to shut down the Yongbyon facility as called for in the February agreement," Hill said.

The February pact between North Korea and five other nations called for North Korea to close the reactor by mid-April and allow in UN inspectors in exchange for energy aid.

But North Korea missed the deadline over a delay in resolving a separate financial dispute involving the country's funds frozen at a Macau bank.

The bank was blacklisted by the U.S. for allegedly aiding North Korea in money laundering and counterfeiting. The $25 million was freed earlier this year with U.S. blessing, but it was only last week that it began to be transferred to a North Korean account at a Russian bank.

Russia's Deputy Foreign Minister Alexander Losyukov said the funds will be fully transferred sometime next week. He said technical difficulties were causing delays.

"The Russian financial service is working hard on this right now," Losyukov was quoted as saying by the ITAR-Tass news agency.

North Korea had made the money's release a main condition for its disarmament, staying away from nuclear talks for more than a year. During that time, it conducted its first nuclear test explosion in October.

Hill also said the North was ready to completely disable the Yongbyon reactor -- a later step in the February agreement -- but details needed to be worked out.

In an interview Friday with CNN, Hill estimated that North Korea possesses "about 110 pounds" of reprocessed plutonium, which he emphasized the country must abandon.

"But frankly, that's going to be at a later stage," he told CNN. "What we're trying to do now is make sure that 110-pound problem doesn't become a 220-pound problem, that is, we'd like to get this reactor shut down, so we don't have more plutonium to deal with."

North Korea is to ultimately get aid worth 1 million tons of heavy fuel oil and other political concessions when it disables the reactor.

Hill also said the two sides discussed holding a meeting of chief delegates to the nuclear talks, involving the two Koreas, Japan, China, Russia and the United States, and a separate conference of foreign ministers.

Chun Yung-woo, South Korea's chief nuclear negotiator, said he understood North Korea gave "a positive response" to holding a chief delegates' meeting in early July and a foreign ministers' meeting "at an appropriate time after that."

North Korea's state-controlled media, other than reporting Hill's arrival and departure, had no reports on the substance of the visit. A Japan-based pro-North Korean newspaper, however, praised it Friday.

Hill's trip will help "accelerate improving North Korea-U.S. relations and implementing agreements" reached at the nuclear talks, said Choson Sinbo, considered a North Korean government mouthpiece.

In rare amicable rhetoric, the newspaper said both the U.S. and North Korea showed "a strong desire" to make progress on the nuclear issue.

"The U.S. attitude is also very progressive," the report said. As long as Washington shows sincerity in improving relations, "it is possible for North Korea to keep pace with the U.S."