President Bush (search) and South Korea's leader said they were united in seeking a Korean Peninsula free of nuclear weapons, and expressed confidence that the standoff with North Korea (search) could be resolved peacefully.

Meeting for the first time Wednesday, Bush and President Roh Moo-hyun (search) also reaffirmed the strength of a military and economic alliance that dates to the 1950-53 Korean War, and agreed to consult closely on a possible realignment of U.S. forces in South Korea.

"We're making good progress toward achieving that peaceful resolution ... in regard to North Korea," Bush said in a White House Rose Garden appearance with Roh. However, North Korea and the United States remained far apart in their positions on the nuclear issue.

Despite policy differences, Roh and Bush did not debate tough questions that might arise if diplomacy with the North fails. Ra Jong-il, South Korea's top security adviser, said there was no mention of the possibility of economic sanctions during the summit.

The two presidents, who have spoken several times by telephone since Roh was inaugurated in February, instead focused on getting to know each other. Bush described Roh as "an easy man to talk to," and Roh said the U.S. president had dispelled his concerns.

"Now I return to Korea with only hopes in my mind," Roh said before dining with Bush in the White House. Roh was leaving Thursday morning for meetings with business leaders in San Francisco and a tour of Silicon Valley before flying back to Seoul on Friday.

Numerous obstacles lie in the path of a peaceful solution to the crisis over North Korea's suspected development of nuclear weapons. South Korea wants the United States to be more open to dialogue with North Korea, but Washington says it won't negotiate its key demand that the North immediately abandon its nuclear programs.

Top Bush advisers are divided internally on whether to pursue a policy of containment or increased dialogue.

Roh and Bush issued a joint statement asserting that their countries would not tolerate nuclear weapons in North Korea and invited other nations in the region to help defuse the standoff. The leaders stated their confidence that peaceful resolution was possible "while noting that increased threats to peace and stability on the peninsula would require consideration of further steps."

"Escalatory moves by North Korea will only lead to its greater isolation and a more desperate situation in the North," their statement said.

The "further steps" mentioned in the joint statement could mean military action as well as "a lot of things in the toolbox," said a senior Bush administration official who briefed reporters after the meeting on condition of anonymity.

The South Koreans, wary of more aggressive action toward North Korea, accepted that vaguely worded reference because Bush and Roh also agreed that diplomacy and increasing isolation of North Korea were the preferred tactics, the official said.

But South Korean officials have said repeatedly that engaging North Korea was the only way to ease tension, and commentators in Seoul said the wording was a concession to the U.S. side.

"This summit could have some negative impact on future inter-Korean relations," Koh Yu-hwan, a professor of North Korea studies at Seoul's Dongguk University, said.

Washington also appeared willing to allay some South Korean concerns, avoiding any harsh criticism of North Korea in the joint statement.

In contrast, North Korea on Wednesday accused the United States of a military buildup, citing the U.S. decision to keep Stealth fighters in South Korea after annual exercises earlier this year.

"The second Korean War, a war to invade North Korea, may break out any moment," said Rodong Sinmun, North Korea's main official newspaper.

North Korea often accuses the United States of keeping nuclear weapons in South Korea, though South Korean experts say Washington removed its tactical nuclear weapons from the South in the early 1990s.

In their statement, Bush and Roh welcomed China's role in hosting a three-way meeting last month that included the North and the United States. But the statement also suggested that subsequent talks should also include South Korea and Japan.

They also agreed to consult closely on the realignment of the 37,000 U.S. troops in South Korea.

At the talks in Beijing, North Korea said it would give up its nuclear and missile programs in exchange for economic aid and security guarantees.

The Beijing talks were the first since the crisis arose in October, when Washington said North Korea had acknowledged running a secret nuclear weapons program in violation of a 1994 treaty with Washington.