2 Koreas’ Nuclear Rift Stalls Economic Pact : Diplomacy: Seoul delegation finds the atmosphere chilled by charges from both sides as talks open in north.

The promise of a landmark economic pact between North and South Korea appeared to fade Tuesday as the two sides traded charges over nuclear weapons on the opening day of talks aimed at reunifying the country.

The talks between the two nations’ prime ministers, the eighth round in a series, had been expected to produce an agreement on direct transportation links, mail service and various economic projects.

But the climate has chilled considerably in the past few days, with North Korea raising charges that the United States is regularly bringing nuclear weapons into the South Korean port of Chinhae, near Pusan, in violation of a non-nuclear pledge.

For their part, Seoul officials continue to press the north to honor a pledge made in February to immediately implement mutual nuclear inspections.

“No substantial progress in relations between the south and north will be possible without finding a bona fide resolution to the nuclear issue,” said South Korean Prime Minister Chung Won Shik in a dinner speech in the North Korean capital of Pyongyang.

North Korea may have abruptly raised the nuclear issue to stall negotiations until it assesses the consequences of the diplomatic ties established last month between Seoul and Beijing, officials here speculate. Beijing, long Pyongyang’s staunchest ally, has pitched the new relations with Seoul as a “significant” step toward easing tensions on the Korean Peninsula.

It is not clear whether Pyongyang has officially acknowledged the Seoul-Beijing breakthrough to the North Korean public or how it has reacted toward China. Seoul delegates reported Tuesday that Pyongyang officials appeared unperturbed but refused to discuss the issue in detail.

“It is basically a Chinese internal matter. It doesn’t matter to us as long as it isn’t an obstacle for reunification,” the South Korean press quoted a Pyongyang official as saying.

The 40-member southern delegation arrived at noon in a caravan of 12 Mercedes-Benzes provided by Pyongyang on a new highway opened in April on the birthday of North Korean leader Kim Il Sung. The highway cut the traveling time from the truce village of Panmunjom to two hours from the previous grueling train trip of five hours. Fifty Korean reporters accompanied the group by bus.

Reflecting the chilly atmosphere, southern delegates reported that Pyongyang citizens greeted their arrival with “indifference.” In the past, there were smiles, even cheers.

In addition to nuclear weapons charges, North Korean officials have demanded that joint U.S.-South Korean military exercises be halted. They have also asked that Seoul release from prison two South Koreans who traveled to Pyongyang without government permission and that it repatriate Lee In Mo, a North Korean imprisoned for more than 40 years on charges of being a guerrilla revolutionary posing as a war correspondent.

“They have been adding new conditions to the talks that are totally unacceptable,” said one Seoul official, who asked not to be identified by name. Criticism of the south’s Roh Tae Woo administration is also increasing, the source said, adding, “We don’t know what these new developments mean.”

A planned exchange of elderly family members, separated since the peninsula was divided after World War II, was called off several weeks ago amid recriminations over the repatriation issue. In their speeches Tuesday, southern delegates lamented the pain of relatives prevented from visiting their ancestors’ graves during the traditional Chusok holiday last week.

Economic disagreements also cloud relations. Although negotiators for both sides clinched the details of the economic pact last week, they have been unable to agree on wording of a general statement. The south is said to want to state specifically that contracts signed between private enterprises will supersede government dictates, while the north wants government approval to be the final authority.

“By agreeing to this, the danger is that contracts will be contracts in name only,” a Seoul official said.