The disclosure -- as well as what Secretary of State Colin Powell characterized as "bellicose statements" -- appeared likely to worsen relations between Washington and Pyongyang after the first face-to-face encounter in six months.

The Pyongyang delegation also claimed it had reprocessed spent fuel rods, moving a step closer to building more nuclear bombs, and threatened to export plutonium -- the product of such reprocessing -- unless the United States agreed to direct talks, officials told NBC News.

Powell ruled out direct talks while repeating Washington's insistence that a "nuclearized [Korean] peninsula is unacceptable."

The meeting in Beijing -- the first face-to-face encounter between U.S. and North Korean officials since October -- was organized as a three-nation gathering at the insistence of the United States, which says the issue of North Korea's nuclear program is a regional issue.

However, it emerged that the three sides only met together on Wednesday. State Department spokesman Richard Boucher said the North Korea and U.S. delegations did not meet on Thursday, but that meetings were held between the Americans and the Chinese as well as between the Chinese and the North Koreans.

NBC's Andrea Mitchell reported that senior U.S. officials, speaking on condition of anonymity, characterized the talks as having at least temporarily broken down.

They said that National Security Adviser Condoleezza Rice instructed Kelly to reject North Korea's demands for one-on-one talks with Washington.

Boucher said he didn't know whether there would be any more meetings in Beijing on Friday.

The State Department spokesman declined to confirm that North Korea acknowledged possessing nuclear weapons, but said that such a disclosure would not be a huge surprise to U.S. officials.

The talks involved Assistant Secretary of State James Kelly and Ri Gun, deputy director of American affairs for North Korea's Foreign Ministry. China's delegation is led by Fu Ying, director general of the Asian Affairs Department of its Foreign Ministry.

STRONG VIEWS

Powell, addressing the Asia-Pacific Council in Washington, D.C., described the talks as "coming to a close" after all sides presented their strong views.

He warned the North Koreans they would be ill-advised to think that "bellicose statements" or threats would force the United States and its allies to make concessions.

Separately, U.S. intelligence officials cautioned that North Korea may have acknowledged reprocessing its spent fuel rods as a negotiating ploy. "We don't even know that they have begun to reprocess," one senior intelligence official said, speaking on condition of anonymity.

However, the official said that North Korea did admit possessing nuclear weapons -- confirming U.S. intelligence reports that the nation has one or two warheads -- making it the ninth nation to officially confirm being a nuclear power. A 10th, Israel, is believed to have 200 to 300 nuclear weapons but has never admitted it, while South Africa only admitted it after the weapons had been destroyed.

SIDES 'HAD TALKS'

Meanwhile, North Korea's state media stepped up its anti-American rhetoric Thursday, expressing outrage over U.S. moves to cut off oil shipments because of its suspected nuclear weapons program.

"The situation on the Korean Peninsula is so tense that a war may break out any moment due to the U.S. moves," the KCNA news agency.

It said relations with the United States had hit "rock bottom" because President Bush named North Korea as part of an "axis of evil," along with Iran and Iraq.

KCNA said the war in Iraq had shown the only way for a country to protect itself was to have a strong military deterrent. Officials from Seoul and Washington say the swift U.S.-led victory in Iraq prompted North Korea to agree to the nuclear talks.

The North's Korea People's Army vowed to "put all people under arms and turn the whole country into a fortress" and urged its soldiers to become "human bombs and fighters ready to blow up themselves" to protect leader Kim Jong Il.

"If the U.S. imperialists and their followers intrude into even an inch of the inviolable sky, land and sea of the (North) ... the (army) will deal merciless deadly blows at the aggressors," North Korean Defense Minister Kim Il Chol was quoted as saying by KCNA.

Still, North Korea said it was ready to settle the dispute over its suspected nuclear weapons programs and that the "master key" for successful talks was for the United States to drop its hostile policy toward Pyongyang.

PENTAGON MEMO

The United States, for its part, had played down expectations before the meetings began, although Powell had said he welcomed North Korea's willingness to meet in a multilateral setting. North Korea had been insisting on direct talks with the United States before agreeing to allowing China to participate.

But the early hopes were quickly dashed last Friday when Pyongyang declared the nation was "successfully reprocessing" 8,000 spent fuel rods. After a brief flurry of controversy, the North Korean news agency issued a correction to assert that the reprocessing had not begun.

U.S. intelligence officials said the reprocessing of the fuel rods would give the Koreans enough plutonium to manufacture five or six nuclear bombs.

Adding to the debate -- and North Korea's suspicions about U.S. intentions -- The New York Times reported this week on a Pentagon memorandum recommending that the United States join with China to press diplomatically for the ouster of North Korea's leadership.

The newspaper said the classified memo circulated among key members of the Bush administration and that it was drafted by officials who oppose talks that could end up benefiting North Korea economically.

The Times said the memo seemed at odds with the State Department approach of convincing Kim that Washington does not intend to oust him. Critics of the Pentagon approach say it is absurd to expect China, a traditional North Korean ally, to join a U.S.-led effort to topple Kim.

Speaking on condition of anonymity, a South Korean official said Wednesday he was concerned that the memo report could undermine the talks in Beijing.

"It could have a negative impact," the official said. "Leaking such a serious comment on the North Korean regime will threaten the meeting."

TALKS BY PHONE

China's official media did not give any hint of trouble within the talks. Late Wednesday, Chinese Foreign Minister Li Zhaoxing and Secretary of State Powell talked by phone and agreed that the Beijing talks were beneficial, the state-run Xinhua News Agency reported.

North Korea and China fought against the United States in the 1950-53 Korean War, which ended without a peace treaty. North Korea and Washington have no formal relations and are still technically at war.

In a likely reference to North Korea's demand for a nonaggression treaty with Washington, KCNA said: "The U.S. should settle the talks from a sincere stand and strive to settle the essential issue."

Washington has refused to offer a formal treaty but says it would consider some sort of written assurance.

China, the North's ally and major aid donor, nevertheless says it doesn't want Pyongyang to acquire nuclear weapons and has appealed for a negotiated settlement to the crisis.

The crisis erupted in October when Washington said the North revealed during a visit by Kelly to Pyongyang in October that it was trying to develop nuclear weapons in violation of a 1994 pledge.

The North has disputed the U.S. claim.

The North likely wants aid for its economy, which has been crippled by the loss of Soviet subsidies and years of drought and mismanagement.

Since the latest nuclear tensions erupted, Pyongyang has become the first country to withdraw from the nuclear Non-Proliferation Treaty and restarted a plutonium-producing reactor.

NBC's Andrea Mitchell in Washington, Robert Windrem in New York, The Associated Press and Reuters contributed to this report.