Koreas predict success in talks, but North threatens withdrawl

SEOUL, South Korea -- The two Koreas predicted a successful outcome to their first Cabinet-level talks in nine months, even as the communist North threatened to pull out of a key 1994 accord with the United States, the South's chief ally.

Negotiators from North and South Korea reached an agreement and invited their aides to draft a joint statement, the North's official Korean Central News Agency, or KCNA, reported.

It did not give details, but the two sides have discussed joint economic projects such as the re-linking of a cross-border railway, and another round of reunions for family members separated by the 1950-53 Korean War.

"I think we will have a good result," Unification Minister Jeong Se-hyun, the South's chief negotiator, said at a banquet with North Korean delegates on the eve of their return to Pyongyang. An announcement on the results of the talks was expected Wednesday.

Reconciliation process

An agreement to resume projects that were suspended because of political tension would signal a revival of the reconciliation process that began with a historic summit of the leaders of the two Koreas in 2000. Exchanges stalled last year, in part because of U.S.-North Korean tension.

One analyst warned that the reclusive North had backed away from many agreements over the decades, and that it would take concrete actions to show it was sincere about improving ties with the outside world.

"We'll know North Korea really means it, if and when its outreach to the rest of us is sustained, substantial, and above all cumulative," wrote Aidan Foster-Carter, a Korea expert at Leeds University in Britain.

There was discord over the so-called Agreed Framework, the 1994 deal under which North Korea said it would freeze its suspected nuclear weapons facilities in exchange for the U.S.-led construction of two nuclear reactors in the North. South Korea, Japan and the European Union are also involved in the project.

To preserve the agreement, the United States must compensate for the loss of electricity caused by delays in building the reactors, because the power shortage has "created grave difficulties in the North's economy as a whole," said an unidentified spokes-man at the North's Foreign Ministry.

"The reality is pushing us to the phase where we should make a final decision to go our own way," the spokesman told KCNA.

North Korea, which has previously made similar threats, rejected a U.S. demand that it open its nuclear facilities to inspections by the U.N. International Atomic Energy Agency.