Five years ago the United States narrowly averted military conflict with North Korea over its nuclear program, which threatened to upset the fragile stability of deterrence on the peninsula. North Korea was about to begin extracting weapons-grade plutonium from its reactor at Yongbyon. The United States was within a day of proposing to the United Nations the imposition of severe sanctions, an action that the North declared would be an act of war.

Some argued this was only rhetoric, but as secretary of defense at the time, I felt these threats could not be dismissed. I reviewed our war contingency plan and prepared substantial reinforcements for our 37,000 troops in South Korea. In the event of war, I was confident of a clear allied victory. But war on the densely populated Korean Peninsula would be different from war in the desert of Kuwait and Iraq, with catastrophic casualties on all sides.

Fortunately, this crisis was resolved not by a destructive war but by a diplomatic agreement, the Agreed Framework, which provided for a freeze and eventual dismantling of nuclear facilities at Yongbyon.

About a year ago, however, we appeared to be headed for another crisis. North Korea tested a long-range ballistic missile over Japan. The test firing provoked strong reactions in the United States and Japan--including calls to end funding for the Agreed Framework. No doubt North Korea would have responded to such a cutoff of funding by unfreezing its nuclear facilities at Yongbyon. The North would then have been in a position to make plutonium rapidly and construct a deadly combination of nuclear warheads and long-range missiles.

During this dangerous period last fall, President Clinton decided to establish an outside review of our entire policy toward North Korea as called for by Congress, and asked me to head this effort. With a review team of government officials, I spent nine months meeting with leaders and senior officials of South Korea, Japan, China, Russia and Europe, with frequent guidance from President Clinton's senior national security advisers, and with many consultations with Congress.

We quickly concluded that any policy toward North Korea must focus on its nuclear weapons and ballistic missile activities, since it is these that could destabilize the deterrence that prevents war.

Any policy must also be formulated with four facts in mind. First, U.S. forces and alliances in the region are strong, and I believe North Korea understands this. Second, while plutonium production at Yongbyon has been frozen, ending the freeze remains North Korea's surest and quickest path to obtaining nuclear weapons. Third, although North Korea is undergoing terrible economic hardships, there is no evidence these are undermining the regime; U.S. policy must deal with the North's regime as it is, not as we might wish it to be. Fourth, no U.S. policy can succeed unless it is shared by our allies in the region, South Korea and Japan.

A number of strategies were suggested for dealing with the problems of North Korea's missile and nuclear programs. A "buyout" of North Korea--trading hard currency for addressing our concerns--was unsatisfactory; it would encourage proliferators in blackmail. A policy of undermining the North Korean regime and hoping to replace it with one that did not have destabilizing ambitions would take too long and, in any event, would not win the support of U.S. allies in the region. A policy of reforming North Korea, attempting to open the reclusive country to the world, would be indistinguishable to the North from an effort to undermine it.

Finally, we judged the status quo to be unsustainable. While the verifiable freeze on Yongbyon is keeping North Korea from getting the plutonium that would make its missiles a more serious threat, it is too easy to imagine circumstances that would undermine the Agreed Framework, on which this freeze depends.

What we recommended was a new and different strategy, one that has the full support of the governments of South Korea and Japan (indeed, it was devised in close collaboration with them). Our approach envisions two possible paths.

On the first path, the United States and its allies would pursue a comprehensive and integrated set of negotiations with the North in which we would seek complete and verifiable assurances that the North has no nuclear weapons program and has ceased all destabilizing missile activities. The United States and its allies would, in a step-by-step and reciprocal fashion, move to reduce pressures that North Korea perceives as threatening.

If the North moves to eliminate its nuclear and long-range missile threats, the United States would move to normalize relations, relax sanctions that constrain trade and take other positive steps that would provide opportunities to North Korea. On the same path, South Korea and Japan would also take steps to improve their relations with North Korea, and together we would address a range of other concerns in our countries.

While the first path holds great promise for U.S. security and for stability in East Asia, it depends on the willingness of North Korea to travel it with us, something of which we cannot be certain. We therefore devised a second, alternative path. On this path, it would not be possible for the United States to pursue a new relationship with the North. Instead, we and our allies would have to take specific steps to contain the threat that we were unable to eliminate through negotiation.

By incorporating two paths, our recommended alternative avoids depending on North Korea's intentions and neither seeks, nor depends upon for its success, any hypothetical transformation of the North's internal system.

Recently the United States and North Korea took a small but important step along the first path. The North announced a unilateral suspension of long-range missile tests while talks with the United States continued. At the same time, the United States took steps to ease a portion of the sanctions in effect since the Korean War. Meanwhile, it is likely that that a senior North Korean official will visit Washington to continue discussions aimed at improving relations.

Both of these steps can easily be reversed if either side sees cause to do so. But if they are followed by other positive steps along the first path, the result could be, after decades of insecurity, a Korean Peninsula that is secure, stable and prosperous.

The writer is a former defense secretary and North Korea policy coordinator for President Clinton.