North Korea defiantly proclaimed itself a nuclear power and called anew on the United States to soften its stance toward the regime, as the two countries met with regional powers Monday at the first full arms talks since Pyongyang's nuclear test.

The talks - also including China, Japan, Russia and South Korea - met after the North ended a 13-month boycott over U.S. financial restrictions. But prospects for progress are uncertain, and North Korea stuck to its previously stated demands as all six countries opened the talks at a Chinese state guesthouse in Beijing.

"North Korea basically seems to say that it cannot dismantle its nuclear program unless the U.S. drops what it calls a hostile policy," a South Korean official said on condition of anonymity due to sensitivity of ongoing talks.

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A South Korean official said Monday that North Korea's opening speech at the talks outlined a series of strong demands.

"North Korea has listed the maximum demands it can make in its speech," the official said on condition of anonymity due to sensitivity of ongoing talks.

North Korea said it doesn't care if other countries accept it as a nuclear state and that it was just satisfied with the fact it had nuclear weapons, the official added.

Delegates from Pyongyang will meet directly with the Americans later Monday, according to the South Korean official.

The sides are working to implement a September 2005 statement from the talks and outline initial steps to be taken. In that agreement - the only ever reached at the talks - the North pledged to abandon its nuclear program in exchange for security guarantees and aid.

"This session has significant meaning in building on past progress and paving the way for the future," Chinese envoy Wu Dawei said at the talks' start. "We hope that with the concerted efforts of all parties, we will be able to produce positive results at this session."

North Korea agreed to return to the six-nation negotiations just weeks after its October 9 nuclear test, saying it wanted to discuss U.S. financial restrictions against a bank where the regime held accounts.

The U.S.-North Korean meetings on the financial issue expected Monday were delayed by a day because the North Korean delegation responsible for that has not yet arrived in Beijing, the South Korean official said.

North Korea had stayed away from the talks and called for the U.S. to end its blacklisting of a Macau bank where the regime held accounts for its alleged complicity in counterfeiting U.S. currency and money laundering by Pyongyang.

A North Korean delegate reiterated Monday that his country is attending the nuclear negotiations in order to address the financial issue.

"We are now a nuclear state and we've come to the six-party talks because we can discuss the financial sanctions within the framework of the six-party talks," an anonymous North Korean official told South Korea's Yonhap news agency.

The U.S. nuclear envoy, Assistant Secretary of State Christopher Hill, called on Pyongyang to live up to its disarmament pledge - threatening a move to sanctions if it fails to do so.

"I hope that (North Korea) understands that, as the rest of us do, that we really are reaching a fork in the road," Hill said Sunday after arriving in Beijing. "We can either go forward on a diplomatic track or you have to go to a much more difficult track and that is a track that involves sanctions and I think ultimately will really be very harmful to the (Pyongyang's) economy."

However, the main North Korean negotiator Kim Kye Gwan said Saturday when arriving in Beijing that he was looking for a first step from the Americans, calling the lifting of the U.S. financial restrictions a "precondition" to the negotiations moving forward.

Hill declined to respond publicly to Kim's demand, but emphasized that UN sanctions for the North's nuclear test would remain in effect until the North's gives up its atomic programs.