Both sides have agreed to let the UN inspect North Korea's activities.

The removal from its terror blacklist is provisional, and North Korea will be put back on the US state department's "state sponsors of terrorism" list if it does not comply with the inspections, the AP news agency reported, citing diplomats. 

Intense debate

The delisting came after North Korea moved to restart a disabled nuclear reactor in the past two weeks.

It also follows days of intense internal debate in Washington and consultations with US negotiating partners.

Christopher Hill, the chief US negotiator, returned from a trip to North Korea to discuss the issue last week.

Hill met North Korean officials for talks in Pyongyang and it was there that a breakthrough was achieved, South Korea's Chosun Ilbo newspaper quoted a key government official in Seoul as saying.

Monica Villamizar, Al Jzeera's correspondent in Washington, said "it is an unprecedented agreement and very surprising" because of North Korea's recent expulsion of nuclear inspectors and testing of missiles.

Downward spiral

Analysts say such a deal could halt the recent downward spiral in bilateral relations.

North Korea wanted to be removed from the US list of state sponsors of terrorism in order to access international aid and loans, and as a step towards its diplomatic rehabilitation.

The disarmament process had seemed close to collapse after the latest row between Pyongyang and Washington.

North Korea began disabling its Yongbyon nuclear reactor in August, but lately it has made moves to reassemble the plant after a US refusal to remove it from the terror list.

Sean McCormack, the US state department spokesman, said North Korea would be required to halt and reverse its recent actions.

"We would hope and expect that if the process is going to move forward, that they take active steps to reverse what they have done over the past month," he said.

Mixed reactions

However, Villamizar said that Washington would not be completely happy with the deal.

"What they expected in the first place was that North Korea would let them inspect any facility at any moment they wanted - so even surprise inspections," she said.

"But both parties have said they will have to previously agree on the sites to be inspected and the time."

Therefore, Villamizar said, Republicans have criticised the deal for having poor transparency.

Barack Obama, the Democrat presidential nominee, said that the move was a "modest step forward" and the US should re-impose sanctions and suspend energy assistance if North Korea does not fulfill its commitments.

John McCain, the Republican presidential nominee, said on Friday, before the official announcement of the delisting, that the denuclearisation had to be stringently enforced and an agreement not made for its own sake.