US politician Bill Richardson says North Korea is moving in the right direction towards resolving a build up of tensions on the Korean peninsula.
Speaking after visiting the North, he said it had shown pragmatism by not reacting to South Korean exercises.
The North shelled Yeonpyeong island last month after similar drills and had threatened more retaliation this time.
He also reiterated that the North had agreed to allow international inspectors into its nuclear facilities.
"The specifics are that they will allow IAEA (International Atomic Energy Agency) personnel to go to Yongbyon to ensure that they are not processing highly enriched uranium and are proceeding with peaceful purposes," he said.
IAEA inspectors who had been monitoring the Yongbyon nuclear plant - the source of North Korea's plutonium - were expelled from the country in April 2009.
In November North Korea revealed that it had a modern uranium enrichment plant, also at the Yongbyon site, to US atomic scientist Siegfried Hecker.
In his report, he said that while the facilities appeared aimed at civilian use, they "could be readily converted to produce highly-enriched uranium (HEU) bomb fuel".
North Korea has not yet confirmed the offer to allow inspectors back in. There has also been no comment yet from the IAEA, and the US state department has voiced scepticism about the reported move.
"North Korea talks a great game. They always do. The real issue is what will they do," US spokesman Philip Crowley said.
"If they are agreeable to returning IAEA inspectors to their country, they have to tell the IAEA that. We've seen a string of broken promises by North Korea going back many, many years."
China, meanwhile, has called on North Korea to accept inspectors.
"North Korea has the right to use nuclear power for peaceful purposes, but also at the same time must allow IAEA inspectors in," Foreign Ministry spokeswoman Jiang Yu said.
"All parties should realise that artillery fire and military force cannot solve the issues on the peninsula, and dialogue and co-operation are the only correct approaches."
'Deeds not words'
Bill Richardson has emphasised that his visit to North Korea - at a time of very high tension on the Korean peninsula - was in an unofficial capacity.
A former US ambassador to the United Nations, he has visited North Korea on several occasions in the past.
"My sense is the North Koreans realise that they have moved too negatively against negotiations, that they have taken some very bad steps and they wanted to move in the right direction," Mr Richardson said.
"They agreed to the proposals that I made.... Now there has to be deeds, not words."
North Korea's closest ally, China, has been pressing for a return to the six-party talks about North Korea's nuclear programmes, but the US, South Korea and Japan have wanted to avoid rewarding the North for what they see as its provocative behaviour.
UN Security Council talks on North Korea ended without a deal at the weekend, reportedly after China refused to agree to a statement critical of its ally.
The South Korean government has also been under huge domestic pressure to take a tough stance towards Pyongyang in the wake of the 23 November shelling of Yeonpyeong, which killed four people.
On Tuesday it deployed troops to a hill called Aegibong just across the western land border with the North ahead of the planned switch-on of Christmas lights.
South Korea used to use Christmas lights to illuminate a steel tower on the hill - but suspended this in 2003 under an agreement with the North to end propaganda activity.
It is the first such display in seven years and South Korean officials said they feared the tree could become a target for the North's guns.