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Bush administration may ease some sanctions on North Korea

WASHINGTON—The Bush administration is considering action to free some North Korean bank accounts as part of a deal to restart the stalled talks on eliminating the isolated communist regime's nuclear weapons.

The package under discussion would have North Korea agree to disable its Yongbyon reactor, which produces plutonium for nuclear weapons, and re-admit International Atomic Energy Agency inspectors, according to U.S. officials and independent experts who've been briefed on the details. The North also would have to provide an inventory of its nuclear infrastructure, experts said.

In return, the United States would give North Korea access to some hard-currency funds that have been frozen for the past 16 months and offer other economic incentives. These could include restoring the delivery of heavy fuel oil, which the energy-starved Stalinist regime needs to run conventional power plants, and yet-to-be-determined relief from international sanctions, said the officials, who spoke only on condition of anonymity because they aren't authorized to discuss administration deliberations.

If the deal comes off, it would mark a dramatic turnaround in U.S. relations with North Korea, which President Bush labeled as part of an "axis of evil" five years ago, along with Iran and Iraq under the late Saddam Hussein.

But North Korea is in a far stronger negotiating position than it was in 2002, when Bush halted heavy fuel oil shipments. That prompted Pyongyang to expel IAEA inspectors; withdraw from the nuclear Non-Proliferation Treaty, the cornerstone of the international arms control system; and end a freeze on operating the Yongbyon reactor, which the Clinton administration had negotiated in 1994.

North Korea has since become a greater threat to regional security. Since 2002, Pyongyang has harvested an estimated 88 pounds of plutonium from 16,000 spent fuel rods removed from Yongbyon—enough for as many as a dozen nuclear weapons. It also ended a moratorium on long-range missile tests and in October conducted an underground nuclear test.

The U.S. officials and the experts cautioned that the deal is far from a foregone conclusion, especially given Pyongyang's erratic negotiating style.

"Many people, including myself, are skeptical," said Daniel Sneider, the associate director of Stanford University's Shorenstein Asia-Pacific Research Center, who learned details of the negotiations from South Korean and American officials.

"I'm not convinced that the North Koreans are really interested in giving up their nuclear weapons program," he said. "And I don't know if the Bush administration is prepared to fully go down the road . . . that necessarily requires them to create a security system . . . which is premised on the continuation of (North Korea's) Kim Jong Il regime."

Any agreement would have to be concluded within the six-party talks on North Korea, whose other participants include China, Japan, Russia and South Korea. Those talks are expected to resume in early February.

At the State Department, hope is rising that a breakthrough with North Korea might be possible.

"There's the potential for cards lining up to produce something," said one senior official.

In September 2005, North Korea agreed to eliminate its nuclear program in return for economic and energy assistance from the six-party nations and a U.S. pledge to take steps to normalize relations.

But the talks stalled after the Bush administration took action against a bank in Macau. The bank, it said, maintained North Korean accounts containing funds from illicit activities, such as the counterfeiting of U.S. currency. The bank froze North Korea's accounts.

Now, officials said, the U.S. government is reviewing the accounts to determine if some of the funds in Banco Delta Asia derive from legitimate business and could be freed as part of the deal to restart the six-party talks.

Top officials from the State and Treasury departments and other agencies met at the White House this week to determine whether to make a gesture to North Korea. No decision was made, two State Department officials said.

Instead, the Treasury Department announced Friday that talks with North Korea on the Banco Delta Asia issue would resume next week in Beijing.

The financial restrictions against North Korea have caused intense friction in the administration, officials said.

Assistant Secretary of State Chris Hill has pushed for flexibility in the U.S. position to advance the larger goal of ending the North's nuclear weapons program, they said. But officials at the Treasury Department and in the office of Vice President Dick Cheney were said to favor maintaining maximum pressure on the North.

Hill held three days of talks earlier this month in Berlin with North Korean envoy Kim Gye-gwan. U.S. officials called those talks productive, saying Kim brought a response to an earlier proposal, tabled by China and backed by the United States, for steps to implement the September 2005 agreement.

Michael Green, who dealt with North Korea policy in 2004 and 2005 as a White House staff member, said Hill has been given a mandate to pursue a partial deal with the North, under a policy known as "Early Harvest."

The United States is seeking to disable and eventually dismantle the Yongbyon reactor, said former White House staff member Michael Green, now at the Washington-based Center for Strategic and International Studies. North Korea wants relief from sanctions, he said.

Green agreed that a freeze of the reactor would open the White House to criticism that it was adopting the Clinton administration's approach, which it once harshly criticized. "I don't think they'll do it," he said, noting that a freeze is a reversible step.

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(c) 2007, McClatchy-Tribune Information Services.

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