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SEOUL, Oct 2 (Reuters) - The top U.S. envoy to sputtering talks on ending North Korea's nuclear arms programme held talks in Pyongyang on Thursday, trying to salvage a troubled disarmament-for-aid deal.

Below are some questions and answers about what is at stake during U.S. Assistant Secretary of State Christopher Hill's trip.

* What does the United States want?

Hill wants North Korea to get back to disarmament talks and abandon its plans to rebuild its plutonium-producing nuclear plant that was being taken apart under the nuclear deal agreed between the two countries along with China, Japan, Russia and South Korea.

The Bush administration, looking for a rare diplomatic success before leaving office, was hoping to have North Korea on the road toward ending its atomic ambitions by the time it turned over power to a new president.

* What does North Korea want?

North Korea wants the United States to drop plans for a rigid mechanism to verify statements Pyongyang made about its nuclear programme so that the secretive state can keep inspectors out of places it does not want them to be.

It also wants the United States to drop it from a State Department terrorism blacklist. Once off the list, the isolated and destitute North stands to see the lifting of trade sanctions and be better able to tap into international finance.

North Korea said it would restore its ageing Yongbyon nuclear plant that makes bomb-grade plutonium because it was angry at the United States for not taking it off the terrorism list.

* Are presidential politics at play?

Analysts said the North may be making moves to restore Yongbyon now because it feels it can squeeze last-ditch concessions out of the Bush administration.

* Where is the wiggle room?

Hill and the North Koreans may be able to find a compromise in verification that puts in place inspections Washington believes are vital without North Korea feeling they have given away unfettered access to its nuclear plants.

Washington has said it will not remove Pyongyang from the terrorism list unless it agrees a verification mechanism.

* What if things go wrong?

The nuclear talks break down. The North reverses disablement steps aimed at putting it out of plutonium production for a year. It stands to lose about 500,000 tonnes of heavy fuel oil, or aid of equal value, pledged to it for steps it had already completed under the nuclear deal.

The North could raise regional tension by test firing its ballistic missiles or conduct another nuclear test. Its first and only test was two years ago. (Reporting by Jon Herskovitz; Editing by Alex Richardson)

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