On Monday North Korea's state-run news agency reported that the US had agreed to remove the country from its list of terrorism-sponsoring states and lift sanctions against it.
According to the agency the agreement came during meetings in Geneva at the weekend between Hill and his North Korean counterpart Kim Kye-gwan.
"They're certainly not off the list now because it depends on further steps that they're going to have to take"
chief US negotiator to North Korea talks
Asked about the report, Hill said Washington had committed to de-listing North Korea as part of a six-nation disarmament deal agreed in Beijing in February, but declined to detail exactly how and when that would happen.
"We have some pretty good ideas about how it will happen. But they're certainly not off the list now because it depends on further steps that they're going to have to take."
Japan's foreign minister also cast doubts over North Korea's claims.
Nobutaka Machimura said a change in North Korea's status would depend "on all kinds of conditions like the disabling of nuclear facilities and complete verification".
"These conditions have to be agreed and then realised. I haven't heard that we've reached that position yet," he said.
Machimura, who is also in Australia for Apec meetings, said he expected to be briefed by Condoleezza Rice, the US secretary of state, on North Korea's status.
During the weekend's talks in Geneva, North Korea agreed to make a full declaration of all its nuclear programmes and to disable them.
In return the it will receive aid, security and diplomatic guarantees – including a normalisation of ties with Washington.
It has already shut down its main plutonium-producing nuclear reactor at Yongbyon, seen as the first stage of the disarmament process.
The North has figured on the terrorism list since one of its agents blew up a South Korean passenger jet in 1987, apparently in a bid to disrupt preparations for the Seoul Olympics the following year.
Apart from mandating US sanctions, inclusion on the list also blocks a country from obtaining low-interest loans from international lending agencies such as the World Bank, the International Monetary Fund and the Asian Development Bank.