* Swedish EU presidency plans to conclude S. Korea pact
* Free-trade agreement estimated to be worth $100 bln
* Diplomats see initialling of deal in September
* EU carmakers remain opposed, BusinessEurope in favour
L'AQUILA, Italy, July 10 (Yonhap) -- South Korean President Lee Myung-bak sought to win Italy's support for an envisioned free trade deal between his country and the European Union in a summit with Italian Prime Minister Silvio Berlusconi here Friday.
The move is part of last-minute efforts by Seoul to conclude the free trade agreement (FTA) while three EU nations -- Italy, Poland and Hungary -- were believed to be holding back their full support for the accord.
Berlusconi agreed to work with the South Korean leader to help "upgrade the Korea-EU relationship to a strategic partnership by concluding the Korea-EU FTA at an early date as agreed in the Korea-EU summit held in Seoul on May 23," Seoul's presidential office Cheong Wa Dae said in a press release.
The agreement could mean the sides are now only a step away from signing the deal which, once signed, is expected to generate billions of dollars in increased trade for both sides.
Poland is said to have withdrawn its early opposition to the proposed deal, with President Lech Kaczynski saying in a joint press conference with Lee after their summit Wednesday that the FTA will help improve the relationship between his country and South Korea.
Lee and the Italian prime minister agreed to improve their countries' bilateral ties, noting their relationship has steadily expanded to economic, political and cultural areas since first established in 1884, according to Cheong Wa Dae.
"The two heads of state agreed to strengthen the cooperation between their countries in dealing with global issues, such as the worldwide financial crisis and climate change," it said in the press release.
They also agreed to work together for an early resumption of six-nation talks on ending North Korea's nuclear ambition, noting its possession of nuclear weapons will not be accepted.
Pyongyang declared it was abandoning the nuclear disarmament talks in protest over U.N. condemnation of its rocket launch in April. The talks involve the two Koreas, the United States, Japan, China and Russia.
bdk@yna.co.kr
(END)
SEOUL (Reuters) - North and South Korean officials held talks on Thursday to salvage a joint factory park in the communist state that has become a key source of foreign cash for Pyongyang, hit by U.N. sanctions for its nuclear test.- - -
The talks come as North Korea looks ready to launch medium or short range missiles from its east coast within days, a South Korean newspaper reported, which could further stoke tensions already high due to the North's May 25 nuclear test.
Washington said this week it has tightened its crackdown on firms linked to the North's lucrative proliferation of missiles, a major source of cash for the destitute state, and has sent the U.S. point man for sanctions to Asia for discussions.
The talks over the Kaesong industrial park, where about 100 South Korean companies pay $70 a month per person to employ about 40,000 North Koreans, have hit snags in previous rounds over the North's demands for sharp raises in wages and land lease fees.
Analysts said North Korea was trying to squeeze more money out of the South Korean companies in Kaesong as U.N. sanctions imposed for its missile and nuclear tests begin to grip the state that produces few goods other than arms it can export.
North Korea has ignored the South's demand for the release of a South Korean worker who has been held at the park located just inside North Korea for more than three months for supposedly insulting the North's political system.
The North said in May it was cancelling all wage, rent and tax agreements for the park, once hailed as a model of future economic cooperation between the rival states technically still at war who share one of the world most militarized borders.
MISSILES MOVES
The North was likely to fire medium or short range missiles from its east coast in early July that could include Scuds with a range of about 340 kilometers (210 miles) or Rodong missiles with a range of up to 1,000 kilometers, the daily JoongAng Ilbo quoted an intelligence source as saying.
Japan's coast guard has said it had monitored no-sail warnings by the North for 10 nautical areas around the Korean peninsula for military firing exercises.
On Tuesday, the United States said it was cracking down on companies involved in North Korea's suspected missile proliferation and in the purchase of equipment that could be used in a nuclear weapons program.
The U.S. Treasury and State Departments moved to freeze the assets of an Iranian and a North Korean firm under an executive order and also barred U.S. firms from dealing with them.
Philip Goldberg, the U.S. envoy who coordinates sanctions against the North, went to China in a bid to get tough with North Korea. China is the North's biggest benefactor whose cooperation could determine the success of any sanctions regime, analysts said.
He will be in Malaysia on Sunday before heading back to Washington on Monday. It was not immediately clear why he was visiting Malaysia.
A North Korean ship being tracked by the U.S. Navy on suspicion of carrying a banned arms cargo has turned around and is headed in the direction of the North after it was seen sailing to Myanmar.
Officials said the North's military grandstanding is likely related to moves by its leadership to begin readying leader Kim Jong-il's youngest son as a future heir by consolidating the 67-year-old leader's power base.
(Editing by Jon Herskovitz and Valerie Lee)
SEOUL, South Korea – North Korea accused Washington of seeking to "provoke a second Korean War" as the regime prepared to hold maritime military exercises off the eastern coast. U.S. and regional authorities were watching closely for signs that North Korea might fire short- or mid-range missiles during the June 25 to July 10
timeframe cited in a no-sail ban for military drills sent to Japan's Coast Guard.
Reports are surfacing online confirming that Microsoft has removed access to its Windows Live MSN services for residents in several embargoed countries, the full list of those effected includes Syria, Cuba, Iran and North Korea.
If, say, you’ve woken up in Cuba this morning and gone to log into your MSN account you would have seen this little error message pop-up, “Error 810003c1”, which, buried in Microsoft’s terms means “Microsoft has shut off the Windows Live Messenger IM for users in the countries embargoed by the US hence Microsoft no longer offers Windows Live Service in your country”.
The reasoning or logic behind which countries get denied access and which get allowed is undisclosed but could be considered more than a little confusing as other countries with sanctions against them remain unhindered in accessing the services.
The reason behind the timing of the decision is also unclear, but one thing is for sure, a simple IP-based blocking system won’t keep MSN users in those countries off of the service for very long.
Japan says it is deploying missile interceptors to destroy any parts of a North Korean rocket that might fall on its territory.
North Korea has said it will launch a satellite into orbit next month.
South Korea, Japan and the US say the launch is cover for a test of the Taepodong-2 ballistic missile.
The US said a launch would violate UN Security Council resolutions. Russia said North Korea should "abstain" from testing any missiles.
'Assure safety'
Japan's Defence Minister Yasukazu Hamada issued the orders to mobilise Japan's missile defence shield after a meeting with Prime Minister Taro Aso and cabinet ministers.
"We will do our best to handle any flying object from North Korea in order to assure the Japanese people's safety and security," said Mr Hamada.
North Korea's missile programme
"A satellite or a missile - we are displeased with anything that is going to fly over our land, and such an action must be stopped."
It is the first time that constitutionally pacifist Japan has deployed the shield. The country's military is also expected to deploy warships off its coast.
North Korea says it intends to test-fire the rocket between the 4 and 8 April.
The trajectory issued by Pyongyang shows the rocket will pass over Japan, with the first booster stage landing in the sea to the west, the second in the Pacific Ocean to the east.
The interception is only likely to be activated if the launch does not go as planned and debris appears to be falling towards Japan.
Russian Deputy Foreign Minister Alexei Borodavkin told journalists that the launch had led to increased tensions in the region, "and this is why it would be better if our partners in North Korea abstained from this".
Japan revised its Self-Defence Forces Law in 2005, legalising possible interceptions of ballistic missiles.
But the country's pacifist constitution does not allow it to intercept a missile if it is clearly heading elsewhere.
The Japanese government had previously warned it would try to shoot down any missile or debris that threatens to hit its territory.
North Korea has said it would regard any rocket intercept as an act of war.
SEOUL (Reuters) - North Korea's Foreign Ministry on Wednesday accused the United States of preparing for a war against the communist state in Pyongyang's first verbal criticism of the Obama Administration.
A ministry spokesman said military drills taking place between U.S. and South Korean forces were "nuclear war exercises designed to mount a preemptive attack on the DPRK." The DPRK is the North's official name, the Democratic People's Republic of Korea.
The comments came as Russia and China -- two of the North's few remaining allies -- said that they were also concerned about rising tensions on the Korean peninsula.
"The new administration of the U.S. is now working hard to infringe upon the sovereignty of the DPRK by force of arms in collusion with the South Korean puppet bellicose forces," said a Ministry of Foreign Affairs spokesman, in comments carried by the North's official KCNA news agency.
"The DPRK, exposed to the potential threat of the U.S. and its allied forces, will take every necessary measure to protect its sovereignty," the unnamed spokesman added.
Since the inauguration of the South's conservative President Lee Myung-bak, the North has all but severed relations with its wealthy neighbor, and in recent weeks increasingly stepped up rhetoric against the United States.
TENSE SITUATION
The North Korean official said that inter-Korean relations had reached their worst phase and the situation had grown so tense that "a war may break out any moment due to the reckless policy of confrontation" pursued by South Korea.
The prickly North has turned increasingly strident in its rhetoric, putting its one-million-strong military on combat readiness over the exercises in the South and planning to launch a long-range missile in what several governments have said would be in contravention of U.N. sanctions.
Media reported last week that Japan and the United States might try to intercept any ballistic missile launched by the North.
The North says the rocket is part of a peaceful space programme and any attempt to shoot down its missile would be seen as an act of war.
North Korea on Monday said it had put its armed forces on full combat readiness in response to the start of the annual military exercises that have been held for years without incident. The drills end on March 20.
On Wednesday, U.S. aircraft carrier USS John C. Stennis made a port call in the southern city of Busan to join the drills while a guided missile destroyer the USS Chafee was in the waters off the peninsula's east.
The commanding officer of the nuclear-powered carrier, Rear Admiral Mark A. Vance said the exercise and the participation of the fleet was not at all in response to the increased tensions surrounding the North's missile launch preparations.
RUSSIA, CHINA CONCERNED
Russia and China called on those involved "to show restraint and composure, and to refrain from any actions that could undermine security and stability in this region," the Russian Foreign Ministry said in a statement on Wednesday.
Russia's Foreign Minister Sergei Lavrov spoke to his Chinese counterpart Yang Jiechi on Tuesday.
Russia and China, together with South and North Korea, the United States and Japan are party to multilateral talks that began in 2003 on ending the North's nuclear arms programme.
Implementation of a key disarmament deal struck in 2005 has been held up as Pyongyang slowed the process of disabling its nuclear facilities while energy aid to the North in return for those steps also dried up in recent weeks.
The conservative South Korean government has stopped aid to the impoverished North after 10 years of no-questions-asked aid by Lee's liberal predecessors, angering Pyongyang's leaders.
After a day of suspending border processing on Monday, the communist North on Tuesday allowed South Koreans back into a lucrative factory just across the armed border.
Traffic and personnel flow across the heavily armed border continued as usual while the military hotline used to process the crossing remained cut from the North's side, officials said.
(Additional reporting by Jo Yong-hak in Busan and Guy Faulconbridge in Moscow; Editing by Jeremy Laurence)
North Korea says the move is part of a plan to reactivate the Yongbyon plant, and that it plans to return nuclear material to the site next week.
The move comes amid a dispute over an international disarmament-for-aid deal.
A similar step in 2002 sparked a crisis which eventually resulted in Pyongyang testing a nuclear weapon in 2006.
The removal of seals and cameras "was completed today" at the site, a spokeswoman for the International Atomic Energy Agency (IAEA) said.
IAEA inspectors will have no further access to the reprocessing plant, she added.
The US said North Korea's decision to exclude UN monitors was "very disappointing" and urged Pyongyang to reconsider the move or face further isolation.
"We strongly urge the North to reconsider these steps and come back immediately into compliance with its obligations as outlined in the six-party agreements," White House spokesman Gordon Johndroe said.
He said that Washington remained "open to further discussions" with the North on their obligations for denuclearisation.
The North has been locked in discussions for years over its nuclear ambitions with five other nations - South Korea, the US, China, Russia and Japan.
Symbolic gesture
Pyongyang began dismantling the reactor, which can be used to make weapons-grade plutonium, last November.
However, on Friday it announced that it was working to reactivate it.
North Korea was expecting to be removed from the US terror list after submitting a long-delayed account of its nuclear facilities to the international talks in June, in accordance with the disarmament deal it signed in 2007.
It also blew up the main cooling tower at Yongbyon in a symbolic gesture of its commitment to the process.
However, the US said it would not remove North Korea from its list of state sponsors of terrorism until procedures by which the North's disarmament would be verified were established.
North and South Korea have been technically at war since their 1950-53 conflict ended without a peace treaty.
Fuel rods
Experts say the Yongbyon plant could take up to a year to bring back into commission, so there will be no new plutonium production for a while.
However, there is plenty already available in the form of the spent fuel rods, taken from the reactor core, but only removed to a water-cooled tank on the site, says the BBC's John Sudworth in Seoul.
It is this nuclear material that will now be introduced into the separate plutonium reprocessing plant, according to the information given to the IAEA.
Some estimates suggest the fuel rods could yield about 6kg (13lbs) of plutonium within two to three months - enough for one atomic bomb to add to North Korea's existing stockpile.
America and China are holding secret talks about their shared fear of instability in nuclear-armed North Korea amid reports that the country's diminutive bouffant-haired dictator Kim Jong-il suffered a serious stroke last month.Source: http://www.telegraph.co.uk/news/worldnews/asia/northkorea/2909511/US-and-China-in-secret-talks-on-N-Korea-chaos-fears-after-Kim-Jong-il-stroke.html
The world's most unpredictable nation is thought to be heading for a succession crisis involving the three pillars of state - the Kim dynasty, the military and the Workers' Party.
Veteran generals and party technocrats are expected to install one of Kim's sons or his brother-in-law as a figurehead for a collective leadership if the ailing 66-year-old "Dear Leader" is incapacitated or dies, US and South Korean intelligence believe.
But Kim's protracted recovery and his failure to groom an obvious successor - in contrast to the way he was prepared for power by his father Kim il-Sung, the nation's founder - have heightened fears of a political vacuum and in-fighting.
His absence from Tuesday's military parade marking the country's 60th anniversary - an annual celebration that he has never previously missed - is seen as in indication that he is seriously ill.
And North Korea's recent failure to complete two accords that would require Kim's approval - verification of nuclear disarmament and an agreement with Japan on abductions of citizens - is a sign that decision-making may already be crippled.
Pyongyang's backtracking on its pledge to abandon its nuclear programme in return for desperately-needed economic aid coincides with reports that it has almost completed a missile base that could put US territory within range.
This has set alarm bells ringing in the White House after President George W Bush recently signed off the controversial nuclear deal with the Stalinist regime. He did so on the advice of Secretary of State Condoleezza Rice but to the dismay of neoconservative hawks like Vice President Dick Cheney.
A senior administration official told Fox News that the US and China, which have often been rivals over regional politics, were holding highly-sensitive talks about what to do if there is ensuing instability in North Korea.
Although Beijing is regarded as an ally of Pyongyang, it does not want its impoverished neighbour to implode, potentially creating a wave of refugees trying to reach China.
US intelligence believes that Kim suffered a major stroke and that, with a family history of diabetes and heart disease, he is a prime candidate for another attack that could kill him. It believes he is able to talk and walk, but is very weak and his recovery could at best be slow.
Although Kim has not apparently chosen a successor, he and his father have both been revered under the state ideology of Juche as near god-like figures. So the country's military and party leaders are expected to choose a close relative for a symbolic role in the succession for the sake of continuity.
His eldest son Kim Jong-nam, 37, would usually have been regarded as the natural successor under Confucian tradition. But the playboy with a penchant for discos, casinos and brothels caused an embarrassing scandal for Pyongyang when he was caught trying to sneak into Japan on a fake Dominican passport in 2001.
He then spent time partying and gambling in the former Portuguese Chinese enclave of Macau. Nonetheless, if he is seen subsequently to have atoned and repented, he could still be rehabilitated.
In his 20s, he seemed to be on the fast-track to succeed his father after he was appointed to a senior post in the domestic intelligence agency where, according to defectors, he oversaw a major purge that ended in dozens of executions.
He also held positions in the secret police, army and Workers' Party.
Known as "Comrade General" after his father promoted him to that rank at 24, his army unit was once hailed on state television for assisting peasant farmers by preparing "good-quality manure" - high praise in North Korea.
And in Jan 2001, a state policy of "New Thinking" was unveiled, putting a priority on the technological reconstruction of North Korea, with a special emphasis on information technology - an area of expertise of Jong-nam.
Travel restrictions did not apply to him and he was believed to be regular visitor to Japan, where he developed his interest in information technology. But later in 2001 came the incident at Narita airport that began his fall from grace.
The death of his mother, an actress who reportedly never married his father, further weakened his status. His wayward reputation was sealed when Japanese media published an interview with a prostitute who said he visited her brothel and had a huge tattoo of a bear on his back.
But Kim himself has often also been described as a communist playboy with a taste for expensive cognac and Western movies, so his oldest offspring's behaviour may not count against him in perpetuity.
His other two known sons are Kim Jong-chol, 27, and Kim Jong-Un, 25, the children of the Japanese-born star of Pyongyang's most famous song-and-dance troupe. Kim Jong-il's former sushi chef Kenji Fujimoto, who defected to Japan, has said that Jong-un is the most favoured of the three sons because of his striking resemblance to his father - a serious advantage in the eyes of a famously vain figure.
But neither has any public profile or is known to have held any significant positions in the military or party. And in a society that places high importance on age and wisdom, it is unlikely that such young men could fulfil even a symbolic leadership role.
The dark horse in the family succession stakes is Kim's brother-in-law Chang Sung-taek. He has two major factors in his favour - he is more mature in years than his nephews and he runs the country's internal security system.
In a worst-case scenario, different Kim relatives could be backed by rival factions. In 2006, South Korea's intelligence service, which has a network of well-placed informants in Pyongyang, predicted that when the dictator died, a power battle would break out between top military officials - in partnership with the dictator's sons.
The current uncertainty coincides with reports that North Korea is completing a long-range missile base larger and more capable than an older and well-known launch pad for intercontinental ballistic missiles, according to the AP news agency.
Jane's Defence Weekly said that the system is about one or two years from first-stage completion, but the launch pad likely has had "emergency launch capability" since 2006.
The base is a major step forward for North Korea's long-range missile programme, said John Pike, an imagery expert with GlobalSecurity.org who was among analysts who first reviewed the information.
"It would suggest they have the intention to develop the capability to perfect a missile to deliver atomic bombs to the United States," he told AP.
North Korea says it has carried out its first test of a nuclear weapon, the state news agency (KCNA) has reported.
It said the underground test, carried out in defiance of international warnings, was a success and had not resulted in any leak of radiation.
Pyongyang triggered an international outcry last week, when it announced plans to carry out the test.
On Sunday, China and Japan said in a joint statement that they would not tolerate such an action.
In response to the reported test, the South Korean armed forces have been put on a heightened state of alert, and President Roh Moo-hyun has called an emergency meeting of his government's National Security Council.
'Historic event'
There has been no official confirmation of the test, although South Korea's Yonhap news agency is reporting that it took place in Gilju in Hamgyong province at 1036 (0136 GMT).
KOREAN NUCLEAR CRISIS
Sept 2005:At first hailed as a breakthrough, North Korea agrees to give up nuclear activities
Next day, N Korea says it will not scrap its activities unless it gets a civilian nuclear reactor
US imposes financial sanctions on N Korea businesses
July 2006: N Korea test-fires seven missiles
UN Security Council votes to impose sanctions over the tests
Oct 2006: N Korea threatens nuclear test
N Korea nuclear timeline
A South Korean official said an 3.5 magnitude seismic tremor had been detected in north Hamgyong province, in the north-east of North Korea.
When it announced the test, KCNA described it as an "historic event that brought happiness to our military and people".
"The nuclear test will contribute to maintaining peace and stability in the Korean peninsula and surrounding region," KCNA said.
The region has been on high alert since North Korea announced last week that it would conduct a nuclear test.
Japan said that if the test was confirmed, it would be a "grave threat", while China denounced the action as "brazen".
Japan's Prime Minister Shinzo Abe has just arrived in Seoul for a meeting with Mr Roh, following talks on the crisis with his Chinese counterparts in Beijing.
Mr Abe said Japan wanted to co-ordinate its response with the South Koreans, and was also in contact with the US and China.
In Tokyo, ministers were called to an urgent meeting, and the government set up a special task force.
The US has yet to give an official response to the reported test, but US negotiator Christopher Hill said last week that North Korea must choose either to have a future or to have nuclear weapons, "but it cannot have them both".
