President Bush says he is prepared to open security talks with North Korea, holding out the prospect of improved relations if the communist government shows a willingness to curb missile development and missile exports.

"The next step is up to North Korea," White House spokesman Ari Fleischer said. "It will be interesting to see how North Korea reacts."

The talks will be the first with North Korea since the final months of the Clinton administration, which fell short in an effort to reach a missile agreement with Pyongyang.

Secretary of State Colin Powell was meeting with South Korean Foreign Minister Han Seung-soo on Thursday to discuss the administration's plans.

South Korean officials in Seoul welcomed Bush's decision.

"We also hope that North Korea will engage in dialogue with the United States with sincerity and make meaningful progress," presidential spokesman Park Joon-young said.

Bush issued a statement Wednesday night about his initiative after a report by The Associated Press disclosed that the administration intended to open low-level talks with Pyongyang, then move to a higher level if both sides agree.

"If North Korea responds affirmatively and takes appropriate action, we will expand our efforts to help the North Korean people, ease sanctions and take other political steps," the president said in a five-paragraph statement.

Sen. Joseph Biden, D-Del., the new chairman of the Senate Foreign Relations Committee, said he welcomed the administration's conclusion that a "comprehensive engagement strategy" with North Korea was the best way to promote peace and reconciliation on the peninsula.

Bush generated controversy in March when he decided to undertake a policy review rather than pick up the negotiations where President Clinton had left them. Powell supported an immediate resumption but was overruled.

During the review process, officials focused on rules that would be required of North Korea to ensure verification of any missile control agreement.

His review complete, Bush said he ordered his staff to discuss a "broad agenda" with North Korea, including the communist nation's nuclear activities, missile programs and missile exports "and a less-threatening conventional military posture."

This was a reference to the large number of troops North Korea maintains along the Demilitarized Zone that divides the North from the South.

North Korea's sanctions are linked to its designation as a state sponsor of international terrorism -- a label requiring that certain economic benefits be denied Pyongyang.

Bush's statement said the United States would encourage progress toward North-South reconciliation, peace on the Korean peninsula and "greater stability in the region."

The missile issue is a subject of keen importance in Washington because Pyongyang's rockets are capable of reaching U.S. territory. Another administration worry is North Korea's export of missiles and missile technology to Iran and other countries.

North Korean leader Kim Jong Il said last month he intends to continue missile sales because his government needs the money.

Officials in Pyongyang also have told American visitors they will reconsider a 2-year-old moratorium on long-range missile tests if the administration doesn't resume negotiations.