The communist rogue-state agreed to hold off on any launches of a new rocket which could carry a warhead to the US mainland, while it hammers the details of the landmark agreement in principle with US officials

The United States, Japan and South Korea hailed the accord, which came during crucial talks in Berlin last week, while Seoul's press branded it a "major breakthrough." "North Korea will refrain from testing any long-range missiles," US National Security Advisor Samuel Berger said following a summit of Asia-Pacific leaders in New Zealand

In exchange, Washington will lift basic trade sanctions in a deal which Berger said averted a "very destabilising event" for Asia with major implications for South Korea, Japan, China and the United States

The sanctions to be relaxed apply to "trade and ordinary goods and services and investment" but would not affect "sensitive items." The launch freeze may pave the way to a long-term moratorium which could transform strained relations between Pyongyang and Washington, which remain technically at war since the 1950-53 Korean conflict, Berger added

But he warned, if Pyongyang does go ahead with a new test-launch, the move would spark a potentially explosive arms race which would destabilise the entire region and relations between the superpowers

Starving North Korea, ravaged by years of famine and economic collapse, last August test-launched a medium-range Taepodong I rocket over Japan, sparking alarm there and in Washington

It is believed to have been preparing the launch of the new long-range Taepodong II

Seoul's press lauded the Berlin agreement as a historic breakthrough, saying it bolstered and validated South Korea's Sunshine Policy of peacefully engaging Pyongyang and would ultimately help boost inter-Korean ties

"This is the first step towards dismantling the Cold War structure on the Korean peninsula," the Joong Ang Ilbo daily said

Newspapers said the two sides would hold expert-level talks to work out details of the agreement and discuss the curbing of North Korea's ballistic exports to other rogue states

Washington has maintained a growing portfolio of sanctions against Pyongyang since the end of the Korean War

The embargo bans US trade and investment to North Korea, blocks international loans and has frozen around 14 million dollars of North Korea's precious foreign currency accounts in the United States

But foreign ministry officials said it was unlikely Washington had agreed to take North Korea off a list of terrorist states, a move which would waive key sanctions to the nation where hundreds and thousands are thought to have died of starvation

South Korean President Kim Dae-Jung welcomed the launch freeze as a vindication of his Sunshine Policy, while his foreign minister said Seoul would support the breakthrough and push for a lifting of sanctions

Japan's Foreign Minister Masahiko Komura said he was "very pleased," adding Tokyo was considering lifting its sanctions against Pyongyang

The United States and its two key Asian allies have said they are ready to improve ties with the North if it gave up its missile threat

The crippled North has long used its weapons of mass destruction as a bargaining chip with which to extract financial concession from its enemies, notably the United States and Japan, in order to stave off economic collapse

But analysts warned the Berlin accord marked only the start of fierce bargaining, pointing out most of the details of the concessions had yet to be worked out and would likely prove tricky

"This is only the start of negotiations and I think we'll find that if North Korea is not satisfied with the benefits Washington proposes, it will put its missile bargaining card back on the table," said Professor You Suk-Ruel

"We are at the start of a long road which in some ways we have seen before," added You, of the state-run Institute for Foreign Affairs and Security

Other analysts said the North stood to gain clear economic and aid benefits from the move, but reserved the right to reverse the moratorium whenever it saw fit.

Japan Welcomes Move But Remains Skeptical
In early reports Japan's Prime Minister Keizo Obuchi in Auckland on Monday welcomed progress in key US-North Korea talks but said he was still awaiting evidence that Pyongyang has abandoned plans to test a long-range ballistic missile.

"We praise and welcome the progress made in the US-North Korea negotiations with regard to missile concerns and US sanctions against North Korea," Obuchi told reporters here on the sidelines of a major Asia-Pacific economic summit.

"We hope that this process will be carried on to establish peace and stability on the Korean peninsula."

North Korea and the United States issued a generally positive joint statement in Berlin Sunday after six days of talks on North Korea's missile program and US sanctions.

But Obuchi said the negotiations had not produced evidence that North Korea is abandoning suspected plans for a missile launch.

"I do consider the US-North Korea negotiations as a significant progress towards a prevention of a missile launch (by Pyongyang)," the premier told journalists here.

"But I still do not believe the agreement between the United States and North Korea provides a solid proof that a missile launch is now frozen," Obuchi added.

The statement was an indication that Japan will not immediately unlock aid to the starving Stalinist state.

Pyongyang stunned the world on August 31 last year when it test-fired a medium-range Taepodong I ballistic missile that flew over Japan. North Korea insisted it was the start of a satellite launch program.

Rising fears that North Korea was preparing to test-launch a longer-range Taepodong II have eased since the announcement of the US-North Korea talks in Berlin.

"Each side came to a deeper understanding of the other's concerns and each acknowledged the need to continue taking steps that address these concerns," North Korea and the United States said in the joint statement.

They said they had agreed "each would endeavour to preserve a positive atmosphere conducive to improved bilateral relations and to peace and security in northeast Asia and the Asia-Pacific region.

North Korean negotiater and vice foreign minister Kim Gye-Gwan told reporters in Berlin the two countries would hold a new round of talks "after setting the exact schedule." He did not elaborate.

US President Bill Clinton discussed relations with North Korea with the leaders of South Korea and Japan on the sidelines of the Asia-Pacific Economic Cooperation forum summit here.

Clinton agreed Sunday with Japan and South Korea to unite against a widely feared North Korean ballistic missile test, Japan's premier said.

"We agreed to work closely to prevent another North Korean missile launch and to contribute to Asian stability," Japanese Prime Minister Keizo Obuchi told reporters after the meeting.

A long-awaited review of US policy on North Korea by former US defense secretary William Perry is nearing completion.

Earlier in Auckland, Clinton told business leaders that "the people of North Korea need food and opportunities, they need engagement with the South and the chance of a brighter future.

"They do not need new weaponry that threatens the security of the region and the world."

Kazuhiro Shimamura contributed to this story
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