Deputy Director General Li Gun, Pyongyang's representative to the talks, made a "blatant and bold" announcement that his country had nuclear weapons, and asked U.S. Assistant Secretary of State for East Asian Affairs James Kelly, "What are you going to do about it?" a source told CNN. 

One official said Li said Pyongyang would consider dismantling its nuclear weapons program if the United States signed a written security statement promising not to attack North Korea. Li said, however, it was not possible to dismantle a nuclear weapon. 

Earlier Thursday, U.S. Secretary of State Colin Powell said the talks, scheduled to continue Friday, were "coming to a close" and all sides presented strong views over nuclear concerns. 

"The sides will return to their capitals and assess what they heard, analyze proposals that were put down by the parties, and determine where they will go next," he told the Asia-Pacific Council. 

"The one thing that is absolutely clear as a result of this meeting once again is that there is unity within the community that we must not allow the peninsula to become nuclear." 

He noted this is the position of "the Chinese government, and of course of the United States, Japan, South Korea and of Russia, Australia and others in the region. North Korea must come to under this." 

In a statement carried Thursday on the North Korean state news agency, Pyongyang said the U.S.-led war in Iraq has shown the only way for a country to protect itself was to have a powerful deterrent. 

In such a situation it said the "master key" to progress in the talks was for Washington to make a "bold switchover" in its policy toward North Korea. 

The statement, which referred to the Beijing talks, appeared to be a hardening of Pyongyang's long-standing position seeking some kind of security guarantee from the United States before it will talk about dismantling its nuclear program. 

"In actuality, the situation on the Korean Peninsula is so tense that a war may break out any moment due to the U.S. moves," the North said. 

The U.S. has insisted it will not be blackmailed, but says it has no plans to invade North Korea or to resort to any kind of military action. 

Nonetheless, officials say their message to the North is that it must immediately end production of nuclear weapons and establish an intrusive inspections regime. 

'Violation of sovereignty'
The Beijing talks were the first official meetings between the United States and North Korea since last October when Washington said North Korean officials admitted to them that they were pursuing an active nuclear weapons program. 

North Korea denies any such admission took place and says the United States is using its accusation as an excuse to justify military action. Kelly was the same U.S. official who confronted Pyongyang about its nuclear program last October. 

Li Gun, from the American Affairs Bureau of the Ministry of Foreign Affairs, is a relatively low-level official who observers say does not have the authority to cut major deals with the United States. 

Officials attending the talks in Beijing have remained tight-lipped about their progress but observers say there is little likelihood of any major breakthrough being announced. Most say the best outcome will be an agreement to meet for further talks at a later date. 

Chinese Foreign Minister Li Zhaoxing spoke by phone Wednesday with Powell and both agreed the talks were "beneficial," China's state-run Xinhua news agency reported Thursday. 

"The two sides exchanged views on how to properly handle the nuclear issue of the Democratic People's Republic of Korea [DPRK] and both believed that the ongoing talks in Beijing [were] beneficial," the Xinhua report said. 

An official wall of silence has surrounded the talks. But South Korea's Chosun Ilbo newspaper quoted sources as saying Kelly demanded North Korea dismantle its nuclear plans verifiably and irreversibly. 

From North Korea's side, the paper said Li admitted the Iraq war had taught Pyongyang to see a nonaggression pact.