Negotiators failed Saturday to clear final hurdles to a deal for North Korea to start dismantling its nuclear program, but officials held out hope they could resolve lingering disputes over how to compensate Pyongyang for disarming.

After a third day of talks, negotiators had not yet reached agreement on a draft proposal from host China, and more meetings were planned Sunday.

"There are still fairly big differences among the different parties," Chinese Foreign Ministry spokesman Qin Gang told a news conference, adding that discussions had focused on economic and energy assistance to North Korea.

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"We do expect to see good progress although we are still likely to face twists and turns," Qin said after a meeting among China, North Korea and the United States. "The talks are still going on in an intensive manner."

The U.S., China, Japan, Russia and South Korea want the North to agree at the talks to make its first concrete steps toward abandoning its nuclear programs since the negotiations began in 2003. The North tested its first nuclear bomb in October during one of the many deadlocks in the talks.

Japan's envoy said Saturday that "North Korea's position continues to be very much apart from that of the other parties.

"The situation continues to be severe," Kenichiro Sasae said. "We are boiling down our problems but there is no conclusion in sight for several issues."

South Korean nuclear envoy Chun Yung-woo also said the key contentious points are about what North Korea should get in exchange for taking the first steps to disarm, but added Pyongyang has maintained its commitment to take first steps.

"North Korea has a firm position on what it is going to do toward denuclearization," he said.

Earlier, U.S. envoy Christopher Hill said the negotiations boiled down to one or two unspecified sticking points after overcoming what he had considered "tough" issues.

"I am hopeful we can get through this," Hill said Saturday morning. "But with the North Koreans you never know what is important, so we will have to see. ... If we live in a logical, rational world, we will get through this."

The Chinese draft proposal — presented after the North agreed in principle at the start of this round of talks to take initial steps to disarm — would grant the communist nation unspecified energy aid for shutting down its main nuclear facilities within two months, South Korea's Yonhap news agency reported.

North Korea is demanding it be given energy aid equivalent to 2 million kilowatts of electricity during the initial disarmament period, Yonhap said.