Hyon Yong Man, a counsellor at Pyongyang's embassy in Vienna, where the IAEA is based, said that $25m in frozen North Korean funds that were expected to reach a North Korean account in Russia had not yet arrived, contradicting previous reports.
"How can a country possibly give up it own deterrence?"
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"As of now, the frozen funds had not reached our bank account. Nobody knows why the remittance is delayed," he said.
"Our side has informed the IAEA that we have no objection to them preparing the visit as a plan, but we are not ready to give our official confirmation for the visit as scheduled by the agency."
A Russian diplomatic source meanwhile said the release of the frozen funds to North Korea will be completed by Friday, .
"It will be completed by June 22, this Friday," the source said, according to Itar Tass news agency on Thursday.
Hill had said that six-country talks on the deal, under which the impoverished country would receive hundreds of millions of dollars in aid, would likely resume in early July.
"We hope that we can make up for some of the time that we lost this spring and we are looking forward to good discussions about that," South Korean broadcaster YTN showed Hill saying upon arrival in Pyongyang.
Hill is the most senior US state department official to visit North Korea since October 2002, when James Kelly, the former US envoy, confronted Pyongyang with evidence that Washington said pointed to a covert uranium enrichment programme.
Hill will stay in Pyongyang until Friday and meet his North Korean counterpart, Kim Kye-gwan, the vice-foreign minister, a US state department spokesman said.
On Saturday, North Korea, which conducted its first nuclear test last October, had said it would re-admit inspectors from the IAEA as required under the accord clinched in Beijing on February 13.