Officials from Japan and North Korea have concluded their first high-level talks in almost two years, but experts say they failed to reach a breakthrough on the main issues dividing them.

The two sides said they will decide within a month whether to resume formal negotiations on establishing diplomatic relations.

Kidnap controversy

Japan believes at least 11 people kidnapped by North Korea Says they were used to teach Japanese to N Korean spies Spies then said to have entered S Korea posing as Japanese tourists

The Stalinist state has been on a diplomatic charm offensive recently as it turns to the outside world, primarily the United States and South Korea, for much needed economic help.

The US has been watching the two-day meeting in Pyongyang to assess how serious North Korea is in its overtures towards the outside world.

Key demand

The two sides released a statement after the meeting saying they would continue to work together to resolve their issues.

"We welcome the talks we have been having toward solving humanitarian problems. We will continue to work toward reducing tension in the region," the statement said.

But the statement made no mention of Japan's complaints that North Korea had kidnapped Japanese citizens .

The head of the Japanese delegation, Hitoshi Tanaka, had said that Tokyo's key demand for the return of at least 11 Japanese citizens it says were kidnapped in the 1970s and 1980s must be resolved.

Refusing to budge

On Sunday, Japanese delegates again stressed that they would give no ground until the mystery is cleared up.

Japan used to be one of the largest donors of food aid to North Korea through the World Food Programme, but this year Tokyo has not given any food aid and has made it clear that future help depends on progress in the kidnapping issue.

North Korea has now agreed to discuss the alleged abductions, an improvement on previous positions, and last week it allowed Japanese Red Cross officials to meet police who are said to be conducting an investigation.

But Japan is insisting on results and experts are warning that this could remain a sticking point on the road to rapprochement.

North Korea for its part is demanding an apology and compensation for 35 years of Japanese colonial rule from 1910 to 1945.

Reaching out

The BBC's Tokyo correspondent Charles Scanlon says that by holding the talks in Pyongyang and arranging meetings with senior leaders, North Korea tried to generate a friendly atmosphere, towards a country it regularly denounces as an imperialist warmonger.

The talks were part of a wider charm offensive towards South Korea and the US, which analysts say is driven by economic need.

Last month, Washington said it was ready to send a high-level envoy to Pyongyang but would first wait to see the outcome of resumed inter-Korean dialogue as well as the talks between Japan and North Korea.