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

SEOUL, June 16—North Korea declared today that it will continue to develop, test and export ballistic missiles, officially acknowledging for the first time a clandestine weapons trade that analysts say has helped build arsenals in Iran, Iraq and Syria.

North Korea's admission added to tensions in Asia following nuclear testing by India and Pakistan, which has also reportedly purchased some of North Korea's Soviet-inspired missiles.

The blunt disclosure of the missile program appears to be aimed directly at the United States, which has imposed a near total economic embargo on North Korea. Pyongyang has been trying for years to persuade Washington to lift the embargo, which is strangling North Korea at a time when its economy is in desperate need of outside assistance.

In Washington, the State Department branded the North Korean statement "irresponsible" and rejected the economic arguments Pyongyang offered to justify missile sales, staff writer Thomas W. Lippman reported.

"Their missile proliferation activities have been of concern to us for a long time," a State Department official said. "It's well known that they sell missiles and technology virtually indiscriminately, including to regions in the Middle East and South Asia where we didn't think it was wise."

If North Korea wants improved relations with the United States and an easing of sanctions, the official said, it should restrain its missile sales, not expand them.

The United States has imposed sanctions on North Korea four times for missile exports, most recently in April of this year after Pakistan conducted flight tests of a missile of North Korean design known in Pakistan as the Ghauri.

Many U.S. officials have pointed to North Korea's missile sales to Iraq and other states as evidence that the Stalinist government in Pyongyang remains a threat to global security. The Clinton administration has pressed North Korea repeatedly to stop exporting missiles -- which, until today, North Korea had flatly denied doing.

"We will continue developing, testing and deploying missiles," said the official Korean Central News Agency, monitored in Tokyo. "If the United States really wants to prevent our missile export, it should lift the economic embargo as early as possible and make a compensation for the losses to be caused by discontinued missile export. . . . Our missile export is aimed at obtaining foreign money, which we need at present."

It was unclear whether North Korean officials had timed their statements to take advantage of concern over the Indian and Pakistani nuclear tests. North Korea, facing desperate food shortages and an economy that has been in a downward spiral for eight years, is widely seen as a shrewd manipulator capable of turning tensions on the Indian subcontinent into an opportunity for itself.

Pyongyang also may be trying to build on any momentum created by South Korean President Kim Dae Jung's recent visit to the United States. Kim, who favors broader peaceful engagement with North Korea, suggested gently to President Clinton and members of Congress that sanctions could be lifted gradually in exchange for reciprocal acts of good faith by Pyongyang.

By pressing the missile point just three days after Kim's return to Seoul, officials in North Korea may be hoping to capitalize on any new softening of Washington's resolve on sanctions.

Donald Gregg, a former U.S. ambassador to South Korea and now chairman of the Korea Society in New York, said he met today with officials of the North Korean U.N. delegation and was told they were dissatisfied with the pace of oil deliveries from the United States promised under a 1994 agreement. In that deal, North Korea agreed to suspend its suspected nuclear weapons program in exchange for two new nuclear reactors and 500,000 tons of fuel oil each year until the reactors were producing electricity.

Several oil shipments have been delayed, and Gregg said the North Koreans complained that the United States was not living up to its end of the deal. He said they argued that steady deliveries of fuel are especially important now during the agricultural growing season.

Gregg said the North Koreans also may feel that there had been less movement on the sanctions issue than they expected following Kim's visit to Washington. That, combined with irritation over the oil deliveries, may have spurred today's announcement, he said.

"The hard-liners may have thought, 'Well, we've got to make a move,' " Gregg said, adding that it is good that North Korea's missile program had finally been "flushed out."

Pyongyang's announcement is not likely to win any friends in Washington. "With missiles of the United States, which is at war with [North Korea] technically, aiming at our territory, we find no reason to refrain from developing and deploying missiles to counter them," the North Korean statement said.

The United States and North Korea began talks last year in which American negotiators hope to persuade Pyongyang to freeze its missile program and join an international agreement to restrict missile proliferation. The talks have gone virtually nowhere; the latest round, set for last August in New York, was canceled, and no new sessions are scheduled.

North Korea's missiles have long been a matter of grave concern in Asia. In 1993, it test-fired a medium-range Rodong-1 model into the Sea of Japan, demonstrating that parts of Japan, a key U.S. ally in the region, were well within the missile's 1,000-mile range.

Defense analysts say North Korea has since developed the Rodong-2 missile, which has a range of 1,500 miles, putting virtually all of Northeast Asia, including the 30 million residents of greater Tokyo, within striking distance. Analysts believe North Korea also is developing missiles with even longer ranges.

North Korea's provocative statements about its missile program come as Pyongyang has been more receptive and open on other issues. In recent months, relations between North and South Korea have thawed somewhat, especially on economic matters.

Under Kim Dae Jung's "sunshine policy" of engaging North Korea, many South Korean business leaders have been traveling to the North to discuss possible ventures there. For example, Chung Ju Yung, founder and honorary chairman of the Hyundai conglomerate, entered North Korea today with a donation of 500 cattle for the impoverished nation.