Associated Press Lim Dong-won, South Korea's special presidential envoy, talks yesterday with reporters during a press conference at the South and North Korea Dialogue Office in Seoul, before leaving for Pyongyang for talks with North Korean leaders.

SEOUL, South Korea - North Korea said yesterday that it will resume dialogue with a U.S.-led international consortium currently building two nuclear reactors in the isolated, impoverished country.

It was unclear from the communist North's official Korean Central News Agency's brief English statement whether North Korea also wants to open dialogue with the U.S. government.

U.S. State Department officials, speaking on condition of anonymity, said the statement appears to refer only to the Korean Peninsula Energy Development Organization, or KEDO, the consortium set up to construct two light-water nuclear reactors in the country.

During contacts in New York last month with North Korean diplomats, U.S. officials proposed that North Korea resume dialogue with Washington as well as the consortium, said the news agency, KCNA.

Quoting an unidentified Foreign Ministry spokesman, KCNA said North Korea "carefully examined the U.S. side's position and decided to resume the negotiations, taking its request into consideration."

Under a 1994 agreement between Washington and Pyongyang, the consortium is building two reactors in the northeastern corner of North Korea.

In that accord, the United States promised those two reactors worth $4.6 billion in return for a freeze on the North's nuclear facilities suspected of being used to build atomic bombs. The reactors, financed mostly by South Korea and Japan, are not of a type that can produce weapons-grade plutonium.

In New York, Yoichiro Yamada, assistant director for policy affairs for KEDO, said yesterday that North Korea had contacted the consortium about resuming talks. He said they were working on scheduling a date.

The North made its announcement after a South Korean special envoy, Lim Dong-won, arrived in the country yesterday to meet Northern leaders and pass on messages from the United States - including, Lim said, the offer to restart talks.

The Clinton administration held talks with the North, including a visit by Secretary of State Madeleine Albright to the capital, Pyongyang, in October 2000, but President Bush ended the dialogue when he came into office and ordered a policy review.

In January, Bush branded North Korea as part of "an axis of evil" of countries - including Iran and Iraq - with ambitions to develop weapons of mass destruction. But the next month, on a visit to South Korea, Bush offered to start talks with the North to discuss ways of ending its alleged weapons program.

KCNA quoted the Foreign Ministry spokesman as saying that during the New York contacts, North Korea underlined that "groundless slanders against (the North) should not be repeated and, if such things happen, it will regard the U.S. position as deceptive."

Yesterday, the White House reaffirmed its willingness to reopen a dialogue with North Korea.

Asked if Bush was willing to stop using the term "axis of evil" to describe North Korea, Iran and Iraq, spokesman Ari Fleischer said "the president will continue to speak out forthrightly about what he sees as ways to make peace throughout the world.

"Our position has always been and will continue to be that we welcome dialogue with North Korea anytime anywhere," Fleischer added.

In the New York meetings, U.S. special envoy Jack Pritchard met twice with North Korea's U.N. mission chief, Pak Kil Yon, and proposed the dialogue resumption.

After the New York talks, South Korean President Kim Dae-jung said he believed that the United States and North Korea were "moving toward dialogue."

North Korea has complained of delays in the reactor project. In retaliation, it is denying U.N. inspectors full access to its nuclear laboratories, making it impossible to determine whether it is operating a clandestine weapons program.

On yesterday, Lim, the South Korean envoy, met in Pyongyang with Kim Yong Sun, a close confidant of leader Kim Jong Il, and was expected to meet the top North Korean leader later during the three-day visit, officials in the South said.

Lim - a diplomatic and national security adviser for South Korean President Kim - underlined in his meetings that the North must engage in dialogue with Washington to try to resolve a long-running standoff, Lee Bong-jo, a South Korean official, told journalists in Seoul.

U.S. and South Korean officials believe that North Korea may have extracted enough plutonium for one or two atomic bombs before it froze its facilities under the 1994 agreement.

The North already has stockpiles of up to 5,000 tons of biochemical weapons and is developing a missile that could carry a significant payload to Alaska, Hawaii and parts of the continental United States, U.S. officials say.

U.S. officials also designated North Korea as a major exporter of missile technology to countries such as Iran, Libya, Syria and Egypt.

Lim, the South's envoy, also urged North Korea to restart projects that the two sides had previously agreed on as part of their own efforts to bring reconciliation on the divided peninsula - including reunions of separated family members and a cross-border rail line, said Lee, the South Korean official.

The Koreas, divided in 1945, share the world's most heavily armed border. About 37,000 U.S. troops are stationed in South Korea as a deterrent against North Korea, a legacy of the 1950-53 Korean War.