- The Washington Times - Sunday, August 16, 2009

SEOUL — North Korean leader Kim Jong-Il held talks with the head of South Korea’s Hyundai Group, the North’s state media reported Sunday, in a rare meeting that could warm prospects for a resumption of stalled cross-border projects.

Meanwhile, North Korea warned the United States and South Korea of “merciless retaliation” over sanctions imposed on the communist country, and nuclear attacks in response to any atomic provocation.

MR. Kim and Hyun Jeong-eun, Hyundai’s chairwoman, had a “cordial talk,” on Sunday, the Korean Central News Agency reported in a brief dispatch from Pyongyang, though it provided few details.

Just days earlier, the North freed a Hyundai worker whom it had detained for months. Pyongyang accused the worker of denouncing North Korea’s government.

Hyundai is a key participant in the cross-border projects that have been stalled since July 2008 when a North Korean soldier shot a South Korean tourist at a mountain resort in the North.

The release of the South Korean worker and Mr. Kim’s meeting with Ms. Hyun could renew efforts to boost industrial cooperation between the two Koreas.

Hyundai Asan, the group’s North Korean business arm, said Ms. Hyun did not release any information about her meeting with Mr. Kim.

It was not immediately clear whether Mr. Kim and Ms. Hyun reached any deal on jump-starting projects that have been deadlocked amid tensions on the divided peninsula over North Korea’s missile and nuclear tests.

Hyundai Asan has spearheaded South Korea’s business engagement with North Korea but has seen two key tour ventures in the North come to a halt and has watched as the North demanded higher rent and salaries for workers at an industrial zone, calling its future into question.

Ms. Hyun traveled to the North last Monday to try to secure the freedom of her employee just days after it released two detained U.S. journalists to former President Bill Clinton.

Ms. Hyun was expected to return to South Korea on Monday.

Despite the recent conciliatory gestures toward the United States and South Korea, North Korea denounced the two countries for their annual computer-simulated war games scheduled to begin Monday.

The North sees the exercises as preparation for an invasion, but the United States and South Korea say the maneuvers are purely defensive.

“Should the U.S. imperialists and (South Korean government) threaten the (North) with nukes, it will retaliate against them with nukes,” North Korea’s military said in a statement reported Sunday by KCNA.

The United States is moving to enforce U.N. as well as its own sanctions against North Korea to punish it for its second nuclear test in May and a series of missile launches.

The U.N. sanctions strengthened an arms embargo and authorized ship searches on the high seas to try to rein in the North’s nuclear program. They also ordered an asset freeze and travel ban on companies and individuals linked to the program.

If the United States and South Korea “tighten ‘sanctions’ and push ‘confrontation’ to an extreme phase, the (North) will react to them with merciless retaliation … and an all-out war of justice,” the North Korean military statement said.

The warning came as a U.S. special envoy responsible for implementing the sanctions plans to visit Singapore, Thailand, South Korea and Japan this week and could travel to China later this month.

Philip Goldberg, the envoy, told reporters last week the measures against North Korea will continue until it takes irreversible steps to scrap its nuclear program.

South and North Korea have hundreds of thousands of combat-ready troops and heavy artillery along the 155-mile border. About 28,500 U.S. troops are stationed in South Korea as a legacy of the 1950-53 Korean War, which ended in a cease-fire, not a peace treaty, leaving the two Koreas technically still at war.

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