North Korea has a strong will to normalise relations with Japan

Japanese official

Pyongyang wants an apology and compensation for Japan's harsh colonial rule of the Korean peninsula before and during World War II.

For its part, Tokyo wants the return of 10 citizens it says were abducted by North Korea in the 1960s and 1970s.

We have deepened our mutual understanding to a certain degree

Jong Thae-hwa, North Korean negotiator

North Korean chief negotiator Jong Thae-hwa told his Japanese counterpart, Kojiro Takano, at the start of Tuesday's talks he believed it was possible "to reach an agreement which everyone can affirm".

A Japanese official said North Korea had requested details of the discussions in Beijing be kept secret.

But he said the talks had been "very serious and heated" and covered issues of "great magnitude".

Kidnap

Tokyo insists progress on the issue of its "kidnapped" citizens is a condition for normalising ties.

Many obstacles still have to be overcome

North Korea has denied abducting anyone, but has agreed to investigate the fate of what it calls "missing" Japanese.

However, there are fears that a recent gaffe by Japanese Prime Minister Yoshiro Mori may have jeopardised chances of finding a solution.

Mr Mori caused outrage earlier this month when he revealed Tokyo had suggested to North Korea that it could arrange for the Japanese to be "found" in a third country.

Missile

The Beijing talks were the third meeting between Japan and North Korea since April when negotiations resumed after a seven-year impasse.

North Korea's 1998 missile test raised tensions between the two countries

Communist North Korea, which has been closed off from the outside world for decades, is in dire economic straits and has been wracked by famine.

Some reports say Tokyo is considering offering Pyongyang an economic aid worth $9bn in lieu of a compensation package.

It is also expected to offer some 500,000 tonnes of humanitarian food aid.

Japan suspended aid deliveries in 1998 when North Korea tested a long-range missile over its territory.

North Korea began opening up in June when its leader Kim Jong-il held a historic summit with South Korean President Kim Dae-jung.

Talks between the United States and North Korea about Pyongyang's missile programme are to begin on Wednesday in the Malaysian capital Kuala Lumpur.