tokyo • US envoy Christopher Hill called yesterday on North Korea to act quickly on its promises to shut a nuclear reactor, saying a long dispute over frozen funds was finally resolved.

As Hill said that six-nation disarmament talks could resume in a matter of weeks, the South Korean military said the communist North had launched a short-range missile, the latest in a string of small-scale tests.

Hill, the chief US negotiator with North Korea, said that Pyongyang at last had in its hands the blacklisted money it had demanded.

"To my understanding, today it was deposited in North Korean accounts in their bank accounts in Russia," Hill told reporters in Tokyo, his last stop in the region after visits to Mongolia, China and South Korea.

"We're very pleased we've passed this banking issue," Hill said.

In Seoul, South Korean President Roh Moo-Hyun echoed his remarks, saying: "The North Korean nuclear issue definitely seems to have entered the settlement stage."

North Korea agreed in February to shut down its Yongbyon reactor, the source of raw material for bomb-making plutonium, in a breakthrough six-nation deal in exchange for badly needed fuel aid and diplomatic benefits.

But the cash-strapped regime refused to meet an April deadline to comply as it had not gained access to the frozen funds held at the Banco Delta Asia in the Chinese territory of Macau.

The 20 to 25 million dollars had been blacklisted in 2005 on US suspicions of money-laundering and counterfeiting.

North Korea also cited the row to boycott six-nation talks for more than a year, during which it tested an atom bomb in October.

Hill said North Korea now had to comply with the February agreement.

"We really have to pick up the pace, get back to the timelines and get through this very crucial phase of disablement," Hill told reporters earlier yesterday in Seoul.

Hill expressed hope at resuming "six-party talks of some kind" in early July.

"I think you will see a lot of bilateral meetings in the coming few days, a lot of efforts to try to coordinate as we try to regain the momentum and make up for the lost time," Hill said in Tokyo.

Amid the diplomacy, North Korea test-fired a short-range missile yesterday into waters off its east coast, a spokesman for South Korea's Joint Chiefs of Staff said.

It was the third launch of short-range conventionally armed missiles in less than a month. The other countries in the six-way talks — China, Japan, Russia, South Korea and the United States — have played down previous tests, calling them routine.