North Korea is ready to improve ties with the US and reform its economy, according to Russia's foreign minister, Igor Ivanov, who met with Kim Jong-il on Sunday.

The comments appeared to back up recent speculation that the hard-line Communist state was considering widespread economic reforms and would welcome a US envoy for discussions.

Pyongyang is ready for a constructive dialogue with the US and Japan without any preconditions

Russian Foreign Minister Igor Ivanov

A new relationship with the US and Japan could begin almost immediately - possibly at the ongoing summit of the Association of South-East Asian Nations (Asean) - Mr Ivanov was quoted as saying by the Russian news agency Tass.

US Secretary of State Colin Powell and North Korea's Foreign Minister Paek Nam Sun are due to attend the summit, prompting speculation that officials from the two sides may meet behind the scenes.

Any talks would follow the issuing by Pyongyang last week of a statement "of regret" for an armed naval clash with South Korea.

There have also been reports that the impoverished state is opening up its economy, with the end of decades-old rice rationing and pay rises for workers.

Mr Ivanov said he spent five hours in talks with the reclusive President Kim at the end of his two-day trip to North Korea, which followed a mission in Seoul.

"Pyongyang is ready for a constructive dialogue with the US and Japan without any preconditions," Mr Ivanov was quoted as saying.

"Such a dialogue would allow the discussion of the entire range of issues concerning the Korean peninsula."

On-off diplomacy

Russia has a special relationship with North and South Korea, being one of few nations to have maintained relationships with both sides since the Korean War.

Mr Ivanov said he had "the impression that North Korean officials are ready for contacts with officials from the United States and Japan as early as the Asean summit in Brunei".

The US last month offered to send a diplomat to North Korea for the first time in the presidency of George W Bush.

But that was put off after the naval battle between the North and the South.

Relations between the US and Pyongyang have deteriorated since Mr Bush came to office in 2001, especially after he labelled the country as part of an "axis of evil" earlier this year.

President Kim also wanted "to continue and to step up" the development of relations with South Korea, Mr Ivanov said.

Russia and North Korea could co-operate in projects in the power industry such as updating Soviet-built power plants, the foreign minister said.

Such projects could be part of a broader development of North Korea's economy, Mr Ivanov added.

"The North Korean leader said that reforms are called upon to help strengthen the country and to raise people's well-being," he said.