After two days of negotiations in the North Korean capital, Pyongyang, the American special envoy Charles Kartman said he was "not satisfied" with explanations offered about an underground bunker being constructed on a mountainside at Kumjongri.
Thousands of workers have been photographed by spy satellites removing earth from the site, which is only 25 miles from Yongbyon, the location of heavy-water nuclear reactors.
The Yongbyon reactors have been inactive since 1994, when an international agreement was signed, intended to prevent North Korea developing a nuclear missile programme. In return for the eventual dismantling of the reactors, the US, Japan, South Korea and the European Union have agreed to supply fuel oil and to build light-water reactors, which produce far less of the radioactive by-products that could be used in nuclear war heads.
But the consortium has been dogged with funding problems and the North Korean government has threatened to restart what it says is an innocent nuclear power programme.
US officials said the Kumjongri site appeared to be either a nuclear reactor or a nuclear reprocessing plant under construction. Mr Kartman asked the government to "remove our suspicions" by allowing unrestricted access to the site. But Pyongyang said it would agree to this only in return for "compensation" , reportedly as much as $300m (pounds 183m) if American suspicions turned out to be unfounded. The US rejected the concept of compensation.
The US and South Korea, Mr Kartman said, "both believe there is compelling evidence for nuclear-related activities".Reuse content