The US has said that North Korean claims it has produced enough plutonium to start making nuclear bombs were cause for serious concern.
Kim Jong-il's involvement in talks with China raised hopes of progress
Although the White House said it could not confirm if the claims were true, it said it would continue to work with China, Japan and South Korea to stop North Korea's nuclear weapons programme.
North Korea claimed to have completed the
reprocessing of 8,000 spent fuel rods to extract plutonium for nuclear
weapons at a diplomatic meeting in New York last week.
The Chinese media on Wednesday reported that Foreign Minister Li Zhaoxing had discussed the crisis by telephone with the US Secretary of State, Colin Powell.
"The two sides agreed to keep contact and exert efforts to further the Sino-US constructive and cooperative relationship," the agency said, but gave no future details.
Meanwhile a senior American politician has warned that the US could go to war with North Korea as early as this year over Pyongyang's alleged nuclear weapons programme.
William Perry, who served as defence secretary under former president Bill Clinton said the key issue was that North Korea appeared to have begun reprocessing spent nuclear fuel rods, a key step towards building up its nuclear arsenal.
"I have thought for some months that if the North Koreans moved toward processing, then we are on a path toward war," he told the Washington Post newspaper.
The BBC's David Bamford, in Washington, says the White House has acknowledged that it does not know for sure whether this latest North Korean claim is genuine or bluster, but the fact that Pyongyang is saying it at all is serious.
"That's why we are working closely with the countries in the region and others to address it," White House spokesman Scott McClellan said.
"North Korea has a clear choice between two paths.
"The international community has made clear that continued
pursuit of nuclear weapons will only lead to further
isolation and a deteriorating situation for the regime in
Asked whether Mr Bush might resort to military force against North
Korea, Mr McClellan said: "The president never takes options
off the table, but it's something that we want to address in
a multilateral way."
The warnings came as Chinese envoys held talks with North Korean leader Kim Jong-il amid mounting concerns over North Korea's nuclear programme.
The BBC's Rupert Wingfield-Hayes, in Beijing, says China is making it clear the purpose of the visit is to get North Korea back to the negotiating table as soon as possible.
China has been under pressure to use its influence, as one of the North's closest allies, to help broker a negotiated solution to the crisis, which has destabilised the region since last October.
South Korea hopes China can persuade the Pyongyang regime to take part in further peace negotiations, involving regional powers and the United States.
North Korea's nuclear programme is creating increasing tension
But North Korea, which blames Washington for provoking the crisis, has insisted on one-to-one talks with the US alone, something Washington is reluctant to contemplate.
Diplomats say China offers the best hope of a negotiated settlement, not least because North Korea depends on China for the bulk of its food and fuel.
China has an interest in the issue, because it does not want a nuclear-armed North Korea in its backyard, but neither does it want Kim Jong-il's regime to collapse, which could result in millions of refugees flooding over its border.