The New York Times, quoting senior US officials, reported on Wednesday that the US is prepared to offer North Korea a new but highly conditional set of incentives to give up its nuclear weapons programmes.
The offer is expected to be disclosed in talks in Beijing on Thursday.
Under the plan, after North Korean leader Kim Jong Il would make a commitment to dismantle the nuclear weapons programme, aid would immediately begin flowing to North Korea and the United States would offer a "provisional" guarantee it would not invade the country or seek to topple Kim.
Direct talks would also begin about lifting US economic sanctions and providing longer-term energy aid and retraining of nuclear scientists, the US officials told the daily on Tuesday.
The energy aid in the form of tens of thousands of tons of heavy fuel oil shipped every month to North Korea would be provided by China, Russia, Japan and South Korea, the daily said.
In return, Kim would be given a "preparatory period of dismantlement" of only three months to seal and shut the North Korean nuclear facilities, a similar condition met by Libya last year, the officials said.
Once the three months are up, the continuation of the oil deliveries and the talks would depend on North Korea giving international inspectors access to suspected nuclear sites, and meeting a series of deadlines for disclosing the full nature of its facilities, disabling and dismantling them, and then shipping them out of the country, as Libya did, the daily said.
"Our allies have been telling us that they think Kim Jong Il is ready for a test of his intentions," one of President George Bush's most senior national security aides said in his interview with the Times.
"So we are prepared to offer them a strategic choice," the aide added.
Another senior aide said: "They may say no - and in that case they will have failed the test."
The officials said they expected an answer from North Korea could take weeks or longer as diplomats consult Kim's government in Pyongyang.
Six-nation talks on North Korea's nuclear weapons programmes start on Wednesday in Beijing.
Separately, Japan's Yomiuri Shimbun daily on Wednesday quoted an anonymous US official as saying that Washington was ready to give North Korea a five-month grace period to abandon its nuclear weapons programmes.
The United States was also ready to discuss providing energy aid to North Korea if it agrees to the freeze at the talks, the Yomiuri said.