North and South Korea agreed on Wednesday to seek a peaceful resolution to North Korea's nuclear arms program, an issue that will be the focus of intensive U.S. diplomacy with Asian and Pacific leaders this weekend. Faced with U.S. evidence, senior North Korean officials acknowledged early in October their country had been processing uranium to build weapons in violation of its international pledges and to the alarm of the United States and its allies.

A cabinet-level delegation from South Korea which had been in North Korea for talks since Saturday returned to Seoul on Wednesday after all-night haggling over the language in their joint statement on the nuclear question.

"South and North Korea will make joint efforts to maintain peace on the Korean peninsula, and will actively pursue dialogue to resolve the nuclear issue and other problems," said the key paragraph of the statement.

South Korea had demanded explicit language committing the North to abandoning its covert nuclear arms scheme and upholding the 1994 "Agreed Framework" with the United States, which requires inspections to verify that Pyongyang is nuclear free.

South Korean Unification Minister Jeong Se-hyun said North Korea had reiterated its statement on Monday that it was ready to discuss all security issues "if the United States is prepared to abandon its hostile policy" toward the communist state.

WARNING DISMISSED

Although North Korea is holding out for talks with the United States, Jeong put the best face on the agreement in comments to reporters upon his return to Seoul.

"It is significant the North has listened sincerely when we conveyed worries the North's nuclear program raised among Korean people and international communities," Jeong said.

"In other times, the North would have defiantly rejected such comments," he said.

North Korea stridently warned the United States on Tuesday it would take unspecified "tougher counter-action" if Washington did not accept talks on the nuclear issue.

"If the U.S. persists in its moves to pressurize and stifle the DPRK (North Korea) by force, the latter will have no option but to take a tougher counter-action," the ruling party daily Rodong Sinmun said in a statement.

U.S. administration officials took a dim view of North Korea's threat, saying Pyongyang's reneging on the 1994 agreement had seriously undermined its credibility.

"In terms of there being an effective mechanism for garnering greater rewards from us, shredding their previous deal with us is not going to be an effective means of convincing us to enter into a new agreement," one official said in Washington.

BUSH WEIGHS OPTIONS

Lee Jung-hoon, a professor of international relations at Yonsei University in Seoul, said Pyongyang's nuclear gambit "will only harden (the U.S.) position on North Korea."

"(Bush) will cut off all links with North Korea and will encourage allies, particularly Japan and South Korea, to moderate or cut off its dealings with North Korea until North Korea comes out much more genuinely in wanting to deal with this."

U.S. officials said Bush and his top aides had made no decisions on whether to impose sanctions or other penalties on North Korea in an attempt to force Pyongyang to reverse course.

In talks with Asian and Pacific leaders this weekend the U.S. president would seek strong statements demanding North Korea give up its nuclear weapons program, the officials said.

Bush will host Chinese President Jiang Zemin at his ranch in Texas on Friday. Then on Saturday the pair are to take part in the annual meeting of the Asia Pacific Economic Cooperation (APEC) forum at Los Cabos, Mexico, which is also being attended by the leaders of Japan, South Korea and Russia.

In their Pyongyang talks, ministers from the two Koreas, still technically at war in the absence of a peace treaty after their 1950-53 conflict, also agreed to build a center for reunions of separated families and to confirm whether people still missing from the war are alive.

To build supra-partisan consensus on the nuclear issue ahead of a December presidential election, South Korean President Kim Dae-jung invited all five candidates vying to succeed him to a security briefing at his office on Wednesday.

"I will set policy after numerous discussions with President Bush , Prime Minister (Junichiro) Koizumi, President Jiang Zemin and others in Mexico," Kim told the candidates.

"But we must not set a deadline," he added.

While all agreed on the need for a peaceful resolution through dialogue, opposition candidate and frontrunner Lee Hoi-chang said Seoul should consider freezing aid to the North.

"I see a problem with continuing as if nothing has changed despite this serious development," Lee told President Kim.

PHOTO CAPTION

South Korean Unification Minister Jeong Se-hyun (L) and his North Korean counterpart Kim Ryung-sung leave a late-night cabinet-level session of talks in Pyongyang October 23, 2002. After haggling overnight, ministers from North and South Korea have agreed to seek a peaceful resolution to North Korea's nuclear weapons issue, reporters from Pyongyang said. (Pool via Reuters)