SEOUL, South Korea - North Korean leader Kim Jong Il expressed regret about his country's nuclear test to a Chinese delegation and said Pyongyang would return to international nuclear talks if Washington backs off a campaign to financially isolate the country, a South Korean newspaper reported Friday.

North Korea's top leader Kim Jong Il, right, shakes hands with Chinese special envoy Tang Jiaxuan during their meeting in Pyongyang, capital of North Korea, in this July 13, 2005, file photo. A Chinese envoy met with North Korean leader Kim Jong Il and delivered a message from Chinese President Hu Jintao, the Chinese foreign ministry said on Thursday October 19, 2006. Ministry spokesman Liu Jianchao said he had no details of the message conveyed by State Councilor Tang Jiaxuan, who flew to Pyongyang, the North Korean capital, on Wednesday. [AP]

"If the US makes a concession to some degree, we will also make a concession to some degree, whether it be bilateral talks or six-party talks," Kim was quoted as telling a Chinese envoy, the mass-circulation Chosun Ilbo reported, citing a diplomatic source in China.

Kim told the Chinese delegation that "he is sorry about the nuclear test," the newspaper reported.

The delegation led by State Councilor Tang Jiaxuan met Kim on Thursday and returned to Beijing later that day - ahead of US Secretary of State Condoleezza Rice's arrival in the Chinese capital Friday. China is viewed as a key nation in efforts to persuade the North to disarm, as it is North Korea's main trading partner.

North Korea has long insisted that the US desist from a campaign to sever its ties to the international financial system. Washington accuses Pyongyang of complicity in counterfeiting and money laundering to sell weapons of mass destruction.

The North has refused since last November to return to the nuclear talks, which also include China, Japan, Russia and South Korea. Pyongyang has sought bolster its negotiating position by a series of provocative actions, test-firing a barrage of missiles in July and performing its first-ever nuclear test Oct. 9.