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N. Korean Move Comes Amid Bid for Talks
With Plan to Conduct Nuclear Test, Pyongyang Again Dismisses U.S. Peace Feelers

By Glenn Kessler
Washington Post Staff Writer
Wednesday, October 4, 2006

North Korea's announcement yesterday that it will conduct a nuclear test came just as the United States, along with South Korea, was launching a new effort to persuade the government in Pyongyang to return to long-stalled disarmament talks.

Top aides to Secretary of State Condoleezza Rice have been shaping the new approach, which began after a summit meeting last month between President Bush and South Korean President Roh Moo Hyun. Rice has described the next six-week period as crucial, saying she hopes to make a trip to Northeast Asia soon to test her ideas.

But U.S. officials said yesterday that the government in Pyongyang, which closely monitors U.S. statements, appears to have concluded that there is no benefit in reaching a deal. Some analysts suggested that North Korea is bluffing to force the United States to begin bilateral negotiations, something the Bush administration has rejected as being a reward for bad behavior.

Instead, Pyongyang's gambit could embolden hawks in the administration who advocate confronting North Korea with a stepped-up campaign of isolation and sanctions, perhaps even a naval blockade. Some officials have privately argued that a nuclear test by North Korea would be a clarifying event that would make the problem apparent to the rest of the world.

This is the second time in recent months that Pyongyang has abruptly dismissed peace feelers from the United States. In July, Rice had also been prepared to fly to Asia to launch a new effort to restart the six-nation talks aimed at ending the impasse over North Korea's nuclear weapons.

A senior Chinese official delivered a message to the North Korean government that, if it did not conduct a ballistic-missile test, Rice was prepared to put a lot on the table, including formally ending the Korean War that erupted five decades ago and discussing the military structure on the Korean Peninsula, U.S. officials said.

The initiative was developed after months of debate among Bush's top advisers. It would have sought ways to encourage North Korea to open up its economy -- much as China did in the 1970s under the leadership of Deng Xiaoping -- and would have indicated a U.S. acceptance of Kim Jong Il's rule.

On July 4, Pyongyang gave its answer: It tested a missile. Rice then scrubbed her trip because of the sudden outbreak of war in Lebanon. The U.N. Security Council -- with the surprising support of China, North Korea's main benefactor -- passed a tough resolution condemning the missile test. U.S. officials began preparing to reimpose some sanctions that had been lifted when North Korea agreed to freeze its nuclear program in 1990s -- but held off an announcement at the request of South Korea.

"The North Koreans hate being ignored, and they are tempted to do things to get attention," one senior administration official said recently, speaking on the condition of anonymity because of the sensitive diplomacy. "We have wondered whether we should try to give the North Koreans another chance, but the North Koreans are not doing anything to show that such a move would meet a promising reply."

Yesterday's North Korean Foreign Ministry statement, issued through the official KCNA news service, put the onus on the United States for the failure of diplomacy. "Nuclear weapons will serve as reliable war deterrent for protecting the supreme interests of the state and the security of the Korean nation from the U.S. threat of aggression," the statement said.

The proximate cause of North Korea's refusal to return to the talks is a Treasury Department action against a bank in Macao called Banco Delta Asia, which the agency had identified as the main conduit for bringing North Korean counterfeit dollar bills into the international system. The Treasury had determined that senior officials at the Macao bank accepted large deposits of cash and agreed to place the bogus money into circulation. Treasury officials also believed that the bank accepted multimillion-dollar wire transfers from North Korean front companies that were deeply involved in criminal activities.

The bank is reputed to hold the private accounts of Kim. the North Korean leader, and his family.

Last year, four days before North Korea reached an agreement with the United States, China, Russia, Japan and South Korea on a "statement of principles" to guide the nuclear negotiations, the Treasury formally designated the bank as a "primary money-laundering concern." Banco Delta Asia quickly teetered on the edge of collapse, and banks around the world began to curtail their dealings with North Korea for fear of being similarly tainted.

After the impact of the Treasury action became clear, North Korea refused to return to the six-party talks.

Before North Korea's announcement yesterday, U.S. and South Korean officials had said they were looking at ways to wrap up the Treasury's investigation of the Macao bank as a way to remove that impediment to the negotiations. Assistant Secretary of State Christopher R. Hill noted last month that the Treasury action concerned only 40 accounts holding about $24 million.

But, now, Pyongyang has dramatically raised the stakes. U.S. officials immediately moved to put North Korea on the agenda of the U.N. Security Council, saying that, for the moment, the time for positive gestures has passed.

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