NEW YORK - Ambassadors of seven UN powers made progress in closed-door talks here Thursday but were still chasing an agreement on new sanctions to punish North Korea for its recent nuclear test, diplomats said.

"We are making the best possible efforts to narrow the area of disagreement," Japan's UN Ambassador Yukio Takasu told reporters after meeting for three hours with his counterparts from Britain, China, France, South Korea, Russia and the United States.

"We are making progress. We continue to make efforts to have an agreement as early as possible" on a "a very strong resolution" by the UN Security Council in response to this unacceptable activity," he said referring to North Korea's May 25 underground nuclear test in violation of UN resolutions.

"We are close," his Russian counterpart Vitaly Churkin concurred as he emerged from the meeting held at the US mission to the UN in New York.

The diplomats said the bargaining would continue in the coming days.

"What we are trying to do is negotiate very seriously the whole aspect of additional measures (sanctions) that the Security Council feels is necessary to be taken," Takasu said.

In a related development, Chinese President Hu Jintao held telephone talks with his US counterpart Barack Obama about the North Korean nuclear program, Chinese state media said Thursday.

No details of the discussion were given, but the United States is pushing for tough UN sanctions on North Korea after Pyongyang tested an atom bomb on May 25, its second such test since 2006.

Last week, the seven UN powers unveiled a tentative draft resolution that would condemn "in the strongest terms" North Korea's nuclear test.

They reached broad consensus on widening the sanctions against Pyongyang, but their text left out details of a key paragraph on possible, additional sanctions that would be slapped on the Stalinist state.

A Western diplomat, speaking on condition of anonymity, said that under consideration was extending the list of entities targeted for travel bans or financial sanctions.

In addition, a broader arms embargo, tougher inspections of cargo, a freeze on North Korean assets abroad and denial of access to the international banking and financial services were also being mulled, the diplomat said.

US and South Korean defense officials say there are signs that North Korea is preparing to fire an intercontinental ballistic missile, in what would be its second such launch in as many months.

But Washington has warned North Korea not to fire a long-range missile, saying it would worsen tensions after the communist state's nuclear test.