SEOUL - North Korea may be preparing to shut down its main nuclear reactor, news reports said Tuesday, renewing hopes that Pyongyang will comply with a disarmament agreement days after it missed a deadline to shutter the facility.

North Korean soldiers patrol the banks of the Yalu River near the North Korean town of Sinuiju opposite the Chinese border city of Dandong April 15, 2007. [Reuters]

The Yongbyon reactor was still in operation, but there was a high possibility that movement of cars and people at the site seen in satellite photos could be linked to a shutdown, South Korea's Yonhap news agency reported, citing an unnamed intelligence official. The Dong-a Ilbo daily carried a similar report.

An official at the National Intelligence Service, South Korea's main spy agency, told The Associated Press they were "following and analyzing some peculiar movements" around the reactor in North Korea, without elaborating. The official spoke on condition of anonymity, citing policy.

Yonhap news agency cited another unnamed intelligence official as saying that South Korea and the United States have been closely monitoring some movement since a month ago.

"The intensity of these activities has increased from about a week or two ago," the official was quoted as saying. "There are activities other than cars and people moving busily."

The report comes after the North missed a Saturday deadline to shut down the reactor and allow UN inspectors to verify and seal the facility under a February agreement with the US and four other countries.

If North Korea complies, that would be its first move toward stopping production of nuclear weapons since 2002, the start of the latest nuclear standoff. The North is believed to have produced as many as a dozen atomic bombs since then, and conducted an underground test detonation in October.

Pyongyang said last week that honoring its pledge was contingent on the release of money frozen in a separate financial dispute after Washington blacklisted a bank where North Korea had accounts. The funds were allegedly used in money laundering and counterfeiting.

The money was freed for withdrawal last week, but it's unclear when the North will move to get its $25 million.

South Korean Foreign Minister Song Min-soon spoke by telephone Tuesday with his US counterpart, Condoleezza Rice, and the two "strongly expressed expectations that North Korea will soon implement disarmament measures," the Foreign Ministry said in a statement.

Song and Rice "reaffirmed that the door to resolving the (bank) issue is clearly open to North Korea and agreed to continue discussions among related countries to resolve the issue," the statement said.

Macau's Banco Delta Asia said Monday it had filed a legal challenge to Washington's decision to cut it off from the US financial system. The bank told the US Department of Treasury that its accusations "lacked specific facts" and were motivated by politics, the bank said in a statement.

The US move was "politically motivated since it was based on disputes between the United States and North Korea." The bank has repeatedly denied knowingly helping in North Korea's alleged illicit activities.

In Washington, the Treasury Department expressed confidence it would ultimately prevail in the legal challenge.

"The Treasury Department has confidence in the merits of its action against Banco Delta Asia, as demonstrated by the information put forth in the final rule," which cuts the bank off from the US financial system, said department spokeswoman Molly Millerwise.

Meanwhile, there have been reports that South Korea was considering suspending rice shipments to the North in an apparent to move to ratchet up pressure.

The two Koreas were set to begin talks Wednesday in Pyongyang to discuss the North's request for 400,000 tons of rice.

South Korea periodically sends rice and fertilizer to the impoverished North, which has relied heavily on foreign handouts since the mid-1990s when natural disasters and mismanagement devastated its economy and famine led to the deaths of as many as 2 million people.

In an another separate report, South Korea may suspend rice shipments to North Korea to ratchet up pressure on the North to comply with its nuclear disarmament pledges after it missed a deadline to shut an atomic reactor.

"We can't just ignore and do nothing if ... North Korea doesn't take initial steps" to disarm as agreed in February at six-nation nuclear talks, an unnamed South Korean official said Monday, according to the Dong-a Ilbo newspaper. Other dailies carried similar reports.

The two Koreas were set to begin talks Wednesday in Pyongyang to discuss the North's request for 400,000 tons of rice.

South Korea periodically sends rice and fertilizer to the impoverished North, which has relied heavily on foreign handouts since the mid-1990s when natural disasters and mismanagement devastated its economy and famine led to the deaths of as many as 2 million people.

An official at South Korea's Unification Ministry, which deals with North Korean affairs, said "nothing has been decided yet." The official spoke on customary condition of anonymity.

It wasn't clear if the official's comment reflected a step back from the ministry's earlier position that South Korea would give rice to the North even if the shutdown deadline was missed.

North Korea had until Saturday to shut down its nuclear reactor, but failed to do so because of a delay in the release of its $25 million in funds frozen in a Macau bank, which was blacklisted by the United States for allegedly assisting the country in money-laundering and counterfeiting.

The North has said it won't take steps to disarm until all the funds are released.

Meanwhile, Macau's Banco Delta Asia said Monday it had filed a legal challenge to Washington's decision to cut it off from the US financial system. The bank told the US Department of Treasury that its accusations "lacked specific facts" and they were motivated by politics, the bank said in a statement.

It did not elaborate, saying only the US move was "politically motivated since it was based on disputes between the United States and North Korea." The bank has repeatedly denied knowingly helping in North Korea's alleged illicit activities.

In Washington, Treasury Department spokeswoman Molly Millerwise said the US "has confidence in the merits of its action against Banco Delta Asia, as demonstrated by the information put forth in the final rule," which blacklisted the bank.

A Russian official said Monday that the US failure to allow the North to have access to its funds had stalled progress on the February agreement.

Under that accord between North Korea and five other nations - South Korea, China, Japan, Russia and the US - the North was also to receive 50,000 tons of heavy fuel oil to be donated by the South in return for shuttering its reactor.

"There won't be any progress until the North Korean side says that it has received the money," Deputy Foreign Minister Alexander Losyukov said, according to the Interfax, ITAR-Tass and RIA Novosti news agencies.

Also Monday, Japan said it was "not appropriate" to set a new deadline for the reactor shutdown and instead insisted that the North respect its promises.

"It is extremely regrettable that North Korea did not follow the agreement," said chief Cabinet spokesman Yasuhisa Shiozaki. "North Korea is in a position to immediately implement the agreement."

Before leaving Beijing on Sunday, the main US nuclear negotiator said Washington would give the North a "few more days" to act.

"We're not happy that the (North) essentially has missed this very important deadline," Assistant Secretary of State Christopher Hill told reporters. "We're obviously going to be watching the situation very closely in the coming days."

The North has made no official comment has come since the deadline, with the country consumed in celebrations for one of its main holidays: the birthday of the country's founder Kim Il Sung, who died in 1994.