Bush concerned about Iran's, N. Korea's nuclear ambition

SANTIAGO, Chile -- Facing nuclear challenges on two fronts, President Bush warned Saturday that Iran's suspected weapons program is "a very serious matter," and he stood united with leaders of Asia and Russia in demanding North Korea's return to stalled disarmament talks.

Iran and North Korea, two nations in what Bush has branded an "axis of evil," dominated the president's attention along with trade and economic issues at the opening of a 21-nation summit of Asian-Pacific leaders. Bush tried to ease global concerns about the sinking value of the dollar, a drop based in part on investors' fears about the huge U.S. trade and budget deficits.

Fresh from his re-election, Bush met in rapid succession in his hotel with the leaders of Japan, South Korea, China and Russia, his partners in the talks with North Korea, which is led by the mercurial dictator, Kim Jong Il.

Reporting on his discussions, Bush said that "the will is strong, that the effort is united and the message is clear to Mr. Kim Jong Il: Get rid of your nuclear weapons programs." Addressing business leaders, he urged nations to purge government corruption, support free trade and strengthen anti-terrorism efforts.

Although it boycotted talks in September, the Bush administration said at the summit that North Korea has told China in recent weeks that it is prepared to participate in the six-nation negotiations aimed at ending its nuclear weapons program. The United States hopes the talks resume by year's end or early next year.

Chinese President Hu Jintao said he and Bush both hoped the North Korean crisis "can be solved peacefully through dialogue." Japanese Prime Minister Junichiro Koizumi also expressed a desire for a diplomatic solution. Hu and Bush exchanged invitations for visits to each other's country, but neither leader agreed to go.

U.S. skeptical of Iran

None of the leaders demanded more flexibility in the North Korean talks or wavered on any of the key issues, a senior official said on condition of anonymity. The message coming out of Santiago is that "all five who are here are ready to go," the official said.

On Iran, the United States is skeptical about Tehran's intentions in talks with Britain, France and Germany about eliminating or dismantling its nuclear weapons systems. Facing a Monday deadline to halt all work related to uranium enrichment, Iran reportedly is producing significant quantities of a gas that can be used to make nuclear arms.

"This is a very serious matter," Bush said, sitting alongside Koizumi. "The world knows it's a serious matter and we're working together to solve this matter." The United States intends to ask the U.N. Security Council to consider economic and diplomatic sanctions against Iran.

Bush praised the efforts of European nations to persuade Iran not to pursue nuclear weapons. "They do believe that Iran has got nuclear ambitions, as do we, as do many around the world," Bush said.

Believed to have one or two nuclear weapons and possibly more, North Korea is demanding security guarantees as a price for ending the impasse. Washington wants an immediate halt and U.N. inspections of North Korea's nuclear activities.

The United States says it can consider security guarantees and economic aid if the freeze on weapons development doesn't last long and is followed by a swift dismantling of nuclear facilities.

After three rounds of inconclusive talks with the United States and others, North Korea boycotted the September session, apparently waiting to see who would win the U.S. election.

"What's very important is for the leader of North Korea to understand that the six-party talks will be the framework in which we continue to discuss the mutual goal we all have, which is to rid the Korean Peninsula of nuclear weapons," Bush said.

Both Bush and the Chinese leader, Hu, expressed a commitment to success.

"I look forward to working with him over the next four years to continue our close work on keeping the peace -- peace in the Korean peninsula, peace throughout the Pacific region and spreading peace throughout the world," Bush said.

"Both sides expressed the hope that the issue will be solved peacefully through dialogue," Hu agreed.

Bush also met with the leaders of Indonesia, Canada and Russia at the summit, which has been disrupted by demonstrations against Bush and the war in Iraq that erupted in poor neighborhoods away from the well-guarded luxury hotels in Santiago where Bush and fellow world leaders were meeting.

Russian President Vladimir Putin agreed with Bush on the need to maintain pressure on Iran and prevent it from acquiring nuclear weapons, the United States said.

On a subject of U.S. concern, Bush asked the Russian leader to explain why he has taken steps widely seen as a move away from democracy. In a lengthy response, Putin looked deep into Russian past, back to the Stalinist period, and argued that his country needs a democratic approach that fits with its unique history and ethnic composition, the senior administration official said. Bush questioned how Putin's approach would move Russian democracy forward.

At his meeting with Bush, Koizumi gave a hearty nod of agreement when Bush reiterated his commitment to a committed to a strong dollar and pledged to work with Congress to reduce short-term and long-term deficits.

The Chinese president pledged anew that China will move to flexible exchange rates that reflects market demands. China has tied its currency, the yuan, at a fixed rate to the dollar. U.S. manufacturers say the tactic has undervalued the Chinese currency by as much as 40 percent and given Chinese companies a huge competitive advantage over U.S. manufacturers.

The dollar slumped to record lows Friday against the euro and a 4 1/2-year low against the Japanese yen, prompting America's trading partners to cry foul because such currency devaluation threatens their exports into the United States by making them more expensive. But a gradually declining dollar could boost the sale of U.S. goods overseas, which could narrow America's trade deficit.