By Kevin Sullivan
Washington Post Foreign Service
Wednesday, June 17, 1998; Page A01

PANMUNJOM, South Korea, June 16—Mooing and jostling in the back of 50 open trucks, 500 fattened cattle were driven through this border village into famine-stricken North Korea today, completing the dream of an idealistic old man and opening new opportunities for two feuding nations.

Chung Ju Yung, 83, the wealthy South Korean industrialist who thought up the improbable cattle drive, led the convoy of trucks in a black limousine. The founder and honorary chairman of the Hyundai conglomerate, Chung was raised as a peasant's son in what is now North Korea. The cattle are his way of helping his ailing homeland.

At Imjingak, the last village before the razor wire and minefields of the Demilitarized Zone, more than a thousand well-wishers, including Buddhist monks and women in traditional pink dresses, cheered as the cattle rumbled past with bells clanging around their necks.

In Panmunjom, which straddles the world's most heavily fortified border, goose-stepping North Korean soldiers in olive-drab uniforms and scores of American and South Korean troops bit back smiles as the herd was driven slowly across a border that has seen few light moments since the Korean War.

Then the extremely frail Chung, aided by a cane and a helper holding each arm, stepped out of his car in an overcoat and gray straw hat and shuffled 30 yards across the frontier -- the first civilian since World War II to make that crossing without a government escort. On the other side, he was greeted by women bearing flowers and whisked away in a motorcade of burgundy Mercedes sedans to begin his eight-day stay.

"I sincerely hope that my visit to North Korea this time will not remain an isolated event but will lay the cornerstone of reconciliation and peace between North and South," Chung said before he left.

Chung's visit to his homeland is a remarkable symbol of improving relations between the two Koreas. For the governments in Pyongyang and Seoul, which both approved the plan, Chung's trip represents a startling reversal of policy. In the past, South Korea has barely allowed its citizens to speak to North Koreans, let alone drive cattle to them. North Korea has been so hostile to its southern neighbor that it has often refused much-needed humanitarian aid from Seoul, choosing to go hungry rather than swallow its pride.

But a new pragmatism tinged with optimism rules on the Korean Peninsula. Since the inauguration of President Kim Dae Jung in February, the South has followed Kim's "sunshine policy" by taking a more moderate approach toward Pyongyang, engaging rather than isolating its neighbor.

The Kim government has separated political and economic dealings with the North, allowing business leaders to pursue deals in North Korea in unprecedented numbers. The Seoul government, which has jailed people for reading North Korean literature or listening to radio broadcasts from Pyongyang, this week began allowing some government-approved North Korean books, music and videotapes to be imported into the South. They also allowed the import of frozen fish and some agricultural products.

Kim has just returned from a nine-day tour of the United States during which he tried to sell President Clinton and Congress on a new approach to North Korea that is more carrot than stick, including the possibility of easing economic sanctions in exchange for good behavior by Pyongyang. Kim has even suggested a meeting with reclusive North Korean leader Kim Jong Il.

The North has largely returned the warmth, even if only to suit its own desperate needs for food and outside assistance. While remaining hard-nosed on many issues -- the government vowed today to continue exporting missiles to countries believed to include Pakistan and Iran -- Pyongyang has shown more willingness to engage Kim Dae Jung's South Korea. Next week the North will send a high-ranking military official to talks in Panmunjom with U. N. officials, including representatives of the United States and South Korea, for the first time in seven years.

Pyongyang has embraced Chung's homecoming tour, dubbed Operation Rawhide by some,which began today when a North Korean soldier unbolted a chain and made way for the 50 Hyundai trucks to cross the gravel no man's land into the North.

"I think it's an important symbol," said Col. Jean-Jacques Herren, a Swiss Army officer assigned to the U. N. observer team at Panmunjom. "If we want to have real trust and cooperation, this channel should be used as much as possible."

Chung recounted his story today in Panmunjom, a village he passed through when he left North Korea in 1933, at the age of 18. Chung recalled how he was born into a poor farming family in the village of Tongchon, where he helped raise the family cattle.

When Chung left home and headed south, he took with him 70 won -- the Korean currency -- that his father had earned by selling a bull. Arriving in Seoul with dreams of becoming a lawyer, he instead started a small business, building his fortune from scratch on the ruins of the 1950-1953 war.

As the nation grew, Hyundai swelled into an empire that includes one of the world's largest automakers, the world's second-largest shipyard and a vast web of companies that make products from semiconductors to aircraft to clothing and employ more than 200,000 workers.

The company is still a family enterprise presided over by the elderly Chung. His brothers, sons and other relatives run Hyundai businesses, but Chung retains almost exclusive control over major policy issues.

Chung has said that he always felt guilty about taking his father's 70 won.

"I am returning back to my home town to pay back the debt owed to my father," said Chung, who will be joined on his trip by three of his brothers, including two who are co-chairmen of Hyundai, and two of his sons.

Chung will more than settle the bill. The 500 cattle delivered today, another 500 expected to be delivered later this month, plus 50,000 tons of corn he has already begun shipping to Tongchon, are estimated to be worth $10 million or more.

As he did on a 1989 visit to his home town, Chung is exploring the possibility of creating a tourist resort near relatively unspoiled Mount Kumkang. And Hyundai is considering several projects.

The South Korean public has supported the new approach to North Korea, giving Kim Dae Jung high popularity ratings and his party strong backing in recent local elections. The Chung story has captured the South's imagination and offered new hope to a nation that has lived in fear -- first from Japanese occupiers, then from North Korea -- for most of this century.

During today's cattle crossing, some of the drivers, dressed in gray Hyundai coveralls, said they were nervous about setting foot in North Korea. But the North Koreans tried to calm their nerves by giving each a gift bag containing bottles of liquor and a carton of cigarettes.

"It was a natural feeling to talk to them," said driver Son Bu Ik. "They are just like us."