The result of the preliminary agreement will be a Memorandum of Understanding between the two nations that set forth developmental guidelines for both launch vehicles that will be used for commercial purposes as well as new generations of ballistic missiles.

The agreement was forced by a test flight of a new version of a ballistic missile conducted by South Korea that violated existing U.S. restrictions on rocket and missile development there, according to a report by Stratfor Inc., an Austin, Texas research and consulting company.

The agreement reached takes off all restrictions on the range and payload capability of "commercial launch vehicles" and allows the range limit for military ballistic missiles to be increased to 300 kilometers.

Stratfor reported that an April 10th test firing of a ballistic missile by the South Korean Defence Ministry flew 40 to 50 km. But sources in the intelligence community indicated that the missile tested was in fact capable of 300 km, and flew with dummy upper stages.

The U.S. Defense Dept. protested the test to the U.S. State Dept., which notified the South Korean government of the U.S. concern. Currently, the agreed limit to ballistic surface-to-surface missiles in the South Korean arsenal is 180 km.

The U.S. appears to be desiring the agreement to cover South Korea's apparent decision to move ahead with advanced missile designs without U.S. approval in the first place.

There seems to be no South Korean military interest in establishing a national space launch capability, nor any identifiable commercial payloads for such a rocket.

Stratfor analysts indicated that French rocket technology was incorporated into the South Korean missile program and may be the reason for the enhanced performance.

The basis of the U.S. opposition to advanced missile designs is the prospect that longer range South Korean missiles, which could reach North Korea, could also reach Japan.

More advanced designs, capable of 1,000 km, could strike Bejing and Tokyo as well. Such advanced designs could arise from a commercial space launch development program- which in fact was the part of the pending agreement that will have no limit.

Thus if commercial space launch was the carrot offered South Korea, it may well prove to be a stick -in the eye of the U.S. administration. So, who's proliferating now?