Reports say North Korea is offering concessions on its nuclear program as South Korea began an artillery drill that threatens to spark renewed hostilities between the two Koreas.
Hours earlier, the United Nations Security Council ended emergency talks in New York with no agreement on a statement seeking an easing of tensions on the peninsula.
South Korea's Defense Ministry said Monday afternoon that the military has begun a live-fire exercise in the disputed area around Yeonpyeong Island, the same island that North Korea shelled during a South Korean exercise last month. North Korea had warned there could be "catastrophic" effects if South Korean went ahead with the drill.
A reporter traveling with Bill Richardson says Pyongyang told the American trouble-shooter it was prepared to let U.N. nuclear inspectors return to North Korea as part of a package to ease tensions.
CNN correspondent Wolf Blitzer also said the North had agreed during a 4-day visit by Richardson to let fuel rods from its nuclear reactor at Yongbyon be shipped out of the country. He said Pyongyang also agreed to the creation of a military commission and a hotline linking the two Koreas and the United States.
It was not clear whether the concessions would be acceptable to South Korea and the United States, which have demanded that Pyongyang apologize for the shelling of Yeonpyeong and the sinking of a South Korean warship in March. Richardson is a former U.S. ambassador to the United Nations.
As preparations went ahead Monday for the live-fire drill - a military exercise using live ammunition - the South Korean military ordered everyone on Yeonpyeong and adjacent islands into air-raid shelters. Residents were also evacuated from at least one South Korean border village
South Korean officials said the artillery exercise would last about two hours. The start of the firing was delayed by foggy weather.
Sunday night in New York, Russian U.N. envoy Vitaly Churkin told reporters after hours of talks that Security Council members could not agree on wording of a statement urging the two Koreas to exercise "extreme restraint." Churkin said it would be better if South Korea did not hold military drills at this time, but at that moment journalists and others on the islands were already being ordered to take shelter.
The U.S. ambassador at the U.N., Susan Rice, said most Security Council members wanted a strongly worded condemnation of North Korea's two attacks on the South this year. However, Rice said several nations - presumably including China, North Korea's closest ally - would not agree.
The U.S. envoy, speaking separately after the Security Council session ended, also reiterated Washington's view that South Korea has the right to conduct military drills in the Yellow Sea, and has done so without any deception.
Seoul says hostile action by North Korea has killed at least 50 of its citizens this year.
North Korea's November 23 attack on Yeonpyeong Island killed four people, including two civilians, and an explosion on March 26 that sank a South Korean warship in the same area killed 46 sailors. An international investigation concluded the ship was sunk by a North Korean torpedo, but Pyongyang has vehemently denied any role in the sinking.
During the emergency talks at the U.N. Sunday, Churkin said Security Council members discussed appointing an international envoy to begin diplomatic talks with both sides. The Russian diplomat said the talks started too late to pursue that goal, and that too many members were unable to act without consulting their governments about the wording of any statement.
Rice said she would not expect the Council to agree on a joint statement regardless how long the meeting lasted.
No one would name the countries to which they were referring.
