"The North agreed to allow International Atomic Energy Agency [IAEA] personnel to return to a nuclear facility in the country and agreed to negotiate the sale of 12,000 fresh fuel rods and ship them to an outside country, presumably to South Korea," CNN's website quoted its reporter Wolf Blitzer as saying.

"The fuel rods would be enough to make about six to eight nuclear weapons," CNN said.

In late November, Pyongyang disclosed to visiting U.S. experts an operational uranium enrichment facility at Yongbyon, prompting fears that the secretive state had begun developing nuclear weapons.

North Korea has been subjected to several rounds of UN Security Council sanctions since it declared itself a nuclear power in 2005. The state broke off talks with South Korea, China, the United States, Japan and Russia over its nuclear program last April.

The South Korean military began live-firing exercises on Yeonpyeong Island near the disputed border with North Korea earlier on Monday.

The drills went ahead despite threats of retaliation from Pyongyang, a month after the North Korean military shelled the island, killing four people.