Japan and North Korea finished their first day of normalization talks on Wednesday in the Mongolian capital of Ulan Bator, with both sides giving positive signs that talks may yield progress.

"Today, we were able to engage in through discussions," Japanese envoy Yoshiki Mine told reporters after the first day talks.

"It was a meaningful exchange of views in order to deepen mutual understanding," he said.

North Korean negotiator Song Il-ho said he was "happy to see Ambassador Mine," who was recently put in charge of the talks, and hoped for "serious achievements as the ambassador takes on this important duty," according to Japanese public broadcaster NHK.

The two delegations discussed on the first day key issues including Japan's reparation for its colonization of the Korean Peninsula from 1910-1945, and North Korea's abduction of Japanese citizens in the 1970s and 1980s.

Differences remained between the two sides during the talks, but they reaffirmed that they would try to narrow gaps.

The Japan-North Korea panel is the last of the five working groups setup under the six-party process, paving the way for a plenary session of the next round of six-party talks.

(Xinhua News Agency September 6, 2007)