North Korea (search) said Monday it does not need nuclear weapons if it is not threatened by the United States, another sign of progress following Pyongyang's agreement over the weekend to return to disarmament talks.

South Korea (search) said Monday its proposal on boosting aid for the impoverished North, to be unveiled when the international nuclear talks resume later this month, will be a cornerstone of efforts to persuade North Korea to disarm. Negotiators from both sides of the divided peninsula met Monday in Seoul for talks on economic cooperation and aid for the North.

North Korea agreed Saturday to return to six-nation nuclear talks the week of July 25 after refusing to attend for more than a year, citing "hostile" U.S. policies. American officials have repeatedly denied any intention to attack the North, and recently said they recognized it as a sovereign nation.

"We do not intend to possess nuclear weapons forever," the North's main state-run Rodong Sinmun daily wrote in a commentary. "If the U.S. nuclear threat to (North Korea) is removed and its hostile policy to 'bring down the system' of the latter is withdrawn, not a single nuclear weapon will be needed."

Separately, the two Koreas were holding economic talks in Seoul, where the South agreed early Tuesday to a request by Pyongyang (search) for 500,000 tons of rice aid.

After all-night negotiations, the sides also agreed early Tuesday to open an economic cooperation consultation office in a joint industrial zone and to conduct test runs in October of restored road and rail links across the heavily armed inter-Korean border.

The South agreed to provide materials for the North to make its own clothes, shoes and soap, and Seoul in exchange will get investment rights into North Korean mining operations for zinc, magnesite and coal, the sides said in a joint statement.

The economic talks are the 10th such meetings since 2000, when a summit between leaders of the divided Koreas heralded a new era of cooperation between the countries that remain technically at war.

The North's return to the nuclear talks has renewed optimism that the 21/2-year-old crisis can be resolved, but officials are urging Pyongyang to not just show up but engage in substantive discussions about giving up its atomic weapons.

Top South Korean security officials met Monday to discuss the coming disarmament negotiations, and called for progress on disarming the North "so that the international society will believe that the negotiations have entered a substantial stage," the South's National Security Council said in a statement.

A senior U.S. official accompanying Secretary of State Condoleezza Rice on an Asian tour said Monday that North Korean officials may be preparing public opinion for the dismantling of its nuclear weapons program.

The official, asking not to be identified, said the North Koreans mentioned that it was the dying wish of late leader Kim Il Sung 11 years ago to have a nuclear-free Korean Peninsula.

Rice is in Tokyo and will arrive Tuesday evening in Seoul for talks expected to focus on the North Korea nuclear issue.

South Korea's Chosun Ilbo newspaper wrote in an editorial Monday that the next round of the arms talks would be "the last chance to solve the nuclear dispute through dialogue" before possible sanctions at the U.N. Security Council.

"If the talks resume, their prospects are by no means bright. Nothing has changed in the basic positions of the U.S. and North Korea," it wrote. "Unless (the talks) achieve substantial progress, they will merely fuel the suspicion that they are a waste of time."

(Copyright 2005 by The Associated Press. All Rights Reserved.)

APTV 07-11-05 2019EDT