Envoy: U.S. Willing to Consider Energy for N. Korea If Nuke Issue Resolved

If North Korea ended its nuclear weapons development, the United States would be willing to consider energy aid for the communist country, a U.S. envoy said Monday.

The comments by Assistant U.S. Secretary of State James Kelly raised the possibility that the United States was willing to make a deal with North Korea to resolve concerns over its nuclear activities.

"Once we get beyond nuclear weapons, there may be opportunities with the U.S., with private investors, with other countries to help North Korea in the energy area," Kelly said at a news conference in Seoul.

Kelly arrived in South Korea on Sunday and met President-elect Roh Moo-hyun, who believes diplomacy is the only solution to the current crisis.

U.S. officials had previously said they would not reward North Korea for abandoning its nuclear programs, saying discussions of aid and better ties must follow steps to dismantle those programs.

But Kelly appeared to be offering a "carrot" to North Korea, which insisted on Sunday that it never admitted having a secret nuclear program, sending another conflicting signal in the escalating crisis over its alleged plans to build nuclear weapons.

"We are willing to talk to North Korea about their response to the international community," on the nuclear issue, Kelly said, echoing recent comments by other U.S. officials.

"I think we're just going to wait to see."

One analyst said the Bush administration seemed divided over how to deal with North Korea, with some officials espousing dialogue and others opposing it.

"It seems the hawks and doves have not yet finished tuning their policy," said Koh Yu-hwan, a professor of North Korea studies at Dongguk University in Seoul.

"But fundamentally, Kelly's comments are not really new since they still carry the condition that North Korea must first give up its nuclear programs," Koh said.

North Korea insistence that it never admitted having a secret nuclear program directly contradicted American reports in October that it had.

"The claim that we admitted developing nuclear weapons is an invention fabricated by the U.S. with sinister intentions," South Korea's Yonhap news agency quoted the official Rodong Sinmun newspaper as saying.

It was not clear if the statement was aimed at influencing a new round of talks on resolving the crisis.

Last week, North Korea withdrew from the landmark Nuclear Nonproliferation Treaty.  On Monday, Rodong Sinmun said the global accord exposed the country to "constant nuclear threat" by the United States, .

"A military option is not a monopoly of the United States," the paper said, warning that North Korea would strike back if attacked.

Kelly also planned to meet Foreign Minister Choi Sung-hong and two presidential security advisers -- Yim Sung-joon and Lim Dong-won.

Kelly will travel Tuesday to China, as well as Singapore, Indonesia and Japan.

The United States believes North Korea has one or two nuclear weapons and could make several more within six months if it extracts weapons-grade plutonium from spent fuel rods at a reprocessing plant.

The North Korean newspaper blamed the United States for the current crisis and warned: "If the United States evades its responsibility and challenges us, we'll turn the citadel of imperialists into a sea of fire."

In the October announcement, the United States said the North admitted having an atomic weapons program in violation of a 1994 accord, under which Pyongyang pledged to freeze operations at its nuclear facilities in exchange for energy supplies.

In response to that admission, the United States suspended fuel shipments and the North said it would bring reactors at its Yongbyon nuclear facility back on line.

After announcing its withdrawal from the treaty Friday, North Korea ratcheted up tensions even further by suggesting it might resume missile testing.

On Saturday, North Korean leaders vowed at a rally attended by 1 million people to "smash U.S. nuclear maniacs" in a "holy war."

But North Korean Deputy U.N. Ambassador Han Song Ryol told New Mexico Gov. Bill Richardson, a former U.S. ambassador to the United Nations, that the country had no intention of building nuclear bombs.

"He told me that in a dialogue with the United States, North Korea would discuss America's concerns over verifying its nuclear program. I think that's positive," Richardson said Saturday at the end of three days of meetings with the North Koreans.

Kelly said the North Korean envoys did not cover any new ground.

"It was a little disappointing, because we really hadn't heard anything from the North Koreans speaking to him that we hadn't heard in their public pronouncements before that," he said.

Also Saturday, a North Korean official said its nuclear plant north of Pyongyang was ready for operation.

The threat of new missile tests came from the North's ambassador to China, Choe Jin Su, who said tests could resume if U.S. relations do not improve.

New tests would be the first since 1998, when North Korea shot a missile over Japan into the Pacific. Pyongyang later set a moratorium on tests which was to last into 2004.

Another official left open the possibility of the North reprocessing spent fuel rods from its nuclear reactor to make atomic bombs. Son Mun San, who oversees Pyongyang's relations with the U.N. International Atomic Energy Agency, said in Vienna, Austria, that the reprocessing plant now stands in a state of "readiness."

Since the nuclear standoff resumed, the North has removed seals placed on one of its nuclear facilities by IAEA monitors and expelled two U.N. inspectors.

During a visit to Russia that ended Sunday, Japanese Prime Minister Junichiro Koizumi urged North Korea to rescind its decision to pull out of the treaty.

"That is what's best for North Korea, for the international community," he said. "And this is true for the United States as well."

The Associated Press contributed to this report.