SEOUL, APRIL 21 (THURSDAY) -- The government announced Wednesday that a major U.S.-South Korean military exercise will be deferred until late this year and could be canceled altogether as a gesture of goodwill to North Korea in exchange for a new international inspection of North Korean nuclear facilities.

The announcement followed a 90-minute private meeting here between South Korean Defense Minister Rhee Byong Tae and Defense Secretary William J. Perry, who told reporters outside the Defense Ministry that he felt "complete solidarity" with the South Korean position on the exercise and many other military matters.

The decision to put off the exercise, called "Team Spirit," until what the government called "the November time frame" is meant to avoid provoking North Korea while U.S. and South Korean diplomats are trying to persuade the hard-line Stalinist state to allow full inspection of its declared nuclear facilities.

Washington is hoping to renew a dialogue with mid-level North Korean diplomats about the inspection within the next week or so, a senior administration official said. Perry indicated Washington wants inspections to go forward soon because North Korea "within weeks" will have to withdraw spent fuel from a 5 megawatt reactor that harbors enough plutonium for four to five nuclear bombs.

"We believe it is critical that that operation be supervised" by the International Atomic Energy Agency (IAEA), Perry told reporters today. Another senior U.S. official said Washington would immediately demand economic sanctions if the fuel is withdrawn without IAEA inspection.

North Korea has denounced past Team Spirit exercises as an unwarranted preparation for military attack and threatened to respond by halting any dialogue on nuclear issues. But U.S. and South Korean officials declared in February that the exercise would go forward after North Korea kept international inspectors from seeing all portions of a nuclear complex that could be used to develop a nuclear arsenal.

South Korean officials publicly attributed the delay to a need to safeguard freshly planted rice seedlings in areas around Seoul where the exercise is usually conducted by nearly 100,000 troops. But they acknowledged it could have been scaled back to curtail the disruption. Perry's decision to back the delay -- in the middle of a vocal campaign by him to boost the readiness of forces here to defend against a North Korean attack -- reflects Washington's underlying desire to avoid any immediate confrontation over the nuclear issue, U.S. officials said. But it also reflects the view of many U.S. officials that holding Team Spirit will not add many military skills to those already provided by a busy schedule of smaller and lesser-known joint exercises here.

Among the issues Perry said he intended to raise during his two-day visit here was his desire to see South Korea boost spending on modern weapons systems such as counter-artillery radar, tactical helicopters and advanced antitank munitions. But South Korea largely preempted the discussion by publicly announcing a decision to accelerate its purchases of some of these weapons.

Col. Park Sung Hun, chief of combat intelligence for South Korea's Joint Chiefs of Staff, told reporters that improvements will soon be made in night-fighting operations, special forces equipment and communications gear. But he did not give details or timing. One U.S. official said the pledge represented "progress" but appeared to fall short of the commitments Washington is seeking.

South Korea's reluctance to do more at Washington's behest is partly due to the absence of great alarm among many officials here about North Korea's nuclear program. While Perry and President Clinton have said the program must be stopped -- even at the risk of war -- Vice Minister of Defense Chung Jung Ho told reporters Wednesday that "the tense situation is not a military crisis, but rather a political crisis" to be resolved through dialogue.

In an implicit rebuke of Washington's recent calls for action, Chung added that "the military situation is much more stable than it appears from the outside, and the Korean people can go about their lives without major concerns." One U.S. official expressed surprise at Chung's remark, while another said his message may have been meant to reassure the population alarmed even by a remote chance of war.

U.S. officials said that during meetings today with President Kim Young Sam and Foreign Minister Han Sung Joo, Perry got into the same spirit and repeatedly emphasized Washington's enthusiasm for diplomacy and its commitment not to initiate hostile action against North Korea. They said Perry even instructed aides that, to avoid inflaming North Korea, he was not to be photographed near a "threatening" piece of military hardware.