SEOUL: North Korea said on Tuesday it has suspended work to disable its nuclear reactor in anger over Washington’s failure to remove it from the US list of terror sponsors. The North said it will soon consider a step to restore the plutonium-producing facility.

The announcement poses the biggest hurdle yet to the communist nation’s denuclearization process under a landmark deal last year.

“The US postponed the process of delisting the (North) as a ‘state sponsor of terrorism,’” the Foreign Ministry said in a statement carried by the official Korean Central News Agency. “Now that the US breached the agreed points, the (North) is compelled to take” countermeasures, it said.

The Foreign Ministry also said the government will “consider soon a step to restore” the nuclear facility at Yongbyon, but it did not elaborate. The disablement was suspended as of Aug 14, it added.

US Secretary of State Condoleezza Rice said North Korea still has obligations to fulfill.

“The work ahead is to get that verification mechanism and therefore to proceed with denuclearisation,” she said during a news conference in Ramallah, West Bank. “We actually are in discussions with the North Koreans and I think we’ll just see where we come out in a few weeks.”

The US offered to remove North Korea from the list of state sponsors of terrorism as one of the key concessions in exchange for the North shutting down and disabling the nuclear reactor under a deal reached last year in six-party negotiations that include China, Japan, the two Koreas, the US and Russia.

In June, the US said it would remove North Korea from the list after it turned in a long-delayed account of its nuclear programmes and blew up the reactor’s cooling tower in a symbolic move to demonstrate its commitment to disarm.

North Korea began disabling the plutonium-producing facilities in November but the North slowed the work in a dispute with Washington over how to verify a declaration of its nuclear programmes.

The two sides have been negotiating on that issue with Washington insisting it would remove the North from the terror list only after it agrees to a verification plan. That has angered North Korea. The North’s statement came shortly after Chinese President Hu Jintao left South Korea where he held talks with President Lee Myung-bak on the North Korean nuclear issue among other topics. South Korean and Japanese officials lamented the North’s move.