BEIJING/SEOUL (Reuters) - China on Tuesday urged North Korea to follow through on its offer to allow U.N. nuclear monitors into the country as a way to alleviate international tensions during a standoff with South Korea.

China, North Korea’s only major ally, has continually urged dialogue to resolve the crisis and has been reluctant to blame its neighbor for the shelling of a South Korean island last month, in which two Marines and two civilians were killed.

South Korea held further live-fire drills on the island on Monday, raising fears of all-out war, but the North did not retaliate. Instead, it offered to accept nuclear inspectors it has kicked out of the country before.

“North Korea has the right to use nuclear power for peaceful purposes, but also at the same time must allow IAEA (International Atomic Energy Agency) inspectors in,” Chinese Foreign Ministry spokeswoman Jiang Yu said in Beijing.

“All parties should realize that artillery fire and military force cannot solve the issues on the peninsula, and dialogue and cooperation are the only correct approaches.”

The United States continued to voice skepticism over North Korea’s intentions, and said it was too early to consider resuming long-stalled six-party talks over its nuclear program as Beijing and Pyongyang hope.

“Right now the action must come not from their words, but from their deeds,” White House spokesman Robert Gibbs said.

New Mexico Governor Bill Richardson said on his return from a visit to Pyongyang, where he acted as an unofficial envoy, that North Korea had promised to allow in inspectors to make sure it is not processing highly enriched uranium.

He told reporters North Korea had shown a “pragmatic attitude” in his unofficial talks.

“The specifics are that they will allow IAEA personnel to go to Yongbyon to ensure that they are not processing highly enriched uranium, that they are proceeding with peaceful purposes,” Richardson said in Beijing, referring to North Korea’s main nuclear site.

But analysts said it was unclear how much access IAEA inspectors would get because North Korea has limited their oversight in the past. They also said the major worry was whether there were other nuclear sites hidden outside of Yongbyon.

“The question that remains is whether this is the only facility. A uranium enrichment programme is much easier to hide than a plutonium one,” said Andrei Lankov at Kookmin University in Seoul.

South Korea and the United States suspect Pyongyang, which carried out nuclear tests in 2006 and 2009, has more sites geared to enriching uranium outside Yongbyon, the complex which is at the heart of the North’s plutonium weapons programme.

It consists of a five-megawatt reactor, whose construction began in 1980, a fuel fabrication facility and a plutonium reprocessing plant, where weapons-grade material is extracted from spent fuel rods.

Lankov said the North’s suggestion of compromise after provocation was a “usual tactic” of the impoverished state that had worked in the past to win aid.

“They create a crisis, they show that they are dangerous and drive tensions high,” he said. “Then they show they could make some concessions.”

If IAEA inspectors were allowed to carry out monitoring, it could help to address a key concern about North Korea’s uranium enrichment work because highly enriched material can be used in atomic weapons.

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Seoul shares rose 0.8 percent, broadly in line with other regional markets, to end at a three-year high on Tuesday, as anxiety over tension on the Korean peninsula eased, but the won currency remained under pressure.

The mood on Yeonpyeong Island had eased after the previous day’s drill, with military personnel visibly relaxed and preparing to sail back to the mainland.

‘DEEDS, NOT WORDS’

North Korea, which has refused full IAEA oversight since 2002 and expelled inspectors last April, has said it only wants to enrich uranium to the low level used to make fuel for a civilian atomic power programme.

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But in order to check this, the IAEA would need continued, unfettered access to all of North Korea’s uranium enrichment activities. It would usually require frequent inspections, video cameras and special seals to ensure that none of the material is being diverted for military use.

Richardson said of the North’s offer: “I believe that’s an important gesture on their part, but there still has to be a commitment eventually by the North Koreans to denuclearize, to abide by the 2005 agreement that says they will terminate their nuclear weapons activities.”

Richardson suggested the offer might pave the way for the resumption of six-party talks that also involve the United States, Russia, Japan, China and South Korea -- although Washington, Seoul and Tokyo have been cool to this idea, reluctant to reward perceived bad behavior.

State Department spokesman P.J. Crowley said U.S. officials had not been briefed on Richardson’s trip and said the onus was on Pyongyang to demonstrate its sincerity.

“We and others have had conversations with North Korea before. The real issue is what will North Korea do. So we’re not going to judge a moment on a conversation between the governor and officials in North Korea,” he said.

A key South Korean government official said the recent aggression by the North was closely linked to the succession from ailing leader Kim Jong-il to his youngest son, Kim Jong-un, and was intended for its domestic audience as much as for anybody.

“We don’t want to give them the misperception that their provocations will help their national interest,” he said.

The U.N. Security Council remained deadlocked in its efforts to ease tensions on the Korean peninsula, but North Korea’s refraining from retaliation and the nuclear offer made to Richardson offered some breathing space.

But the South Korean government official, who declined to be identified, said Seoul could not take the North Korean offer seriously as it was not official. He said the five parties had to agree first on what to offer the North.

“Then we can pursue six-party talks. But the next six-party talks will be the grand bargain. That means a target year (for dismantlement) and the whole picture in the next round, not partial elements.”