Seoul Sees ‘Grave Threat’ in North’s Move : Asia: Pyongyang’s withdrawal from the nuclear inspection treaty will endanger peace, South Korea says.

President Kim Young Sam on Friday called North Korea’s decision to withdraw from the Nuclear Non-Proliferation Treaty “a grave threat not only to the safety of South Korea but also to international peace.”

Kim, installed as president Feb. 25, called his Cabinet into an emergency session that continued into the evening. He urged the North Koreans to reverse their decision.

Despite the surprising announcement from Pyongyang, the North Korean capital, South Korean officials said the government will abide by its decision Thursday to repatriate an ailing North Korean spy, Li In Mo, 76. The north has demanded Li’s release for years.

The officials also said they will try to continue a dialogue with the north.

Late Friday, however, Information Minister On In Hwan declared that North Korea’s action “will have a grave impact on all existing accords between South and North Korea,” including a historic 1991 agreement to seek reconciliation and ultimate reunification.

“North Korea will be held solely responsible for the consequent rise in south-north tension and probable international sanctions against it,” On said in a statement. South Korea, he added, “is fully prepared to deal promptly and resolutely with any provocation by North Korea.”

The north called its withdrawal from the treaty “a well-justified self-defensive measure against the nuclear war maneuvers of the United States and the unjust act” of the International Atomic Energy Agency, based in Vienna.

“We joined . . . with a view to getting the nuclear weapons out of South Korea and removing the nuclear threat to us and we are now withdrawing from it because it is being abused to destroy our republic,” the North Korean news agency quoted deputy Foreign Minister Kang Sok Chu as saying.

IAEA demands for special inspections of two sites at Yongbyon, near Pyongyang, precipitated the decision to pull out of the treaty. The agency’s inspectors last year were shown a nuclear fuel reprocessing plant capable of producing plutonium, and the IAEA said that data provided by North Korea indicated that it might have produced more plutonium--which can be used to make nuclear weapons--than it had declared.

Pyongyang has denied developing or making nuclear weapons and said the two sites are non-nuclear military installations. It accused the IAEA of abandoning its neutrality.

Analysts here said the North Korean move marks a victory for Pyongyang hard-liners that promises to aggravate painful economic stagnation produced by three years of decline. North Korea’s tiny economy is about one-tenth of the south’s $300-billion yearly gross national product.

The decision slams the door on potential economic cooperation with South Korea, Japan and the United States, all of which have made resolving doubts about the north’s suspected development of nuclear weapons a condition of improving relations.

In Tokyo, Prime Minister Kiichi Miyazawa reiterated that point Friday, warning North Korea not to expect any progress in negotiations to restore diplomatic relations without resolving the nuclear issue.

North Korea’s announcement “is really dismaying,” he said.

Foreign diplomats in Pyongyang contacted by phone from Tokyo said the showcase capital, one of the few areas in the secretive nation open to outsiders, remained calm. There were no signs of increased tension or military readiness, they said, despite a “semi-war footing” declared by the government Monday to protest a joint U.S.-South Korean military exercise called Team Spirit.

The diplomats advised South Korea and its allies not to overreact to Pyongyang’s moves, which they said might be bluster. “One can understand that North Korea is very nervous about the Team Spirit exercise. But Team Spirit will blow over and at the end of the month that will be history,” one of the diplomats said. “As far as pulling out of the treaty, no one knows what the next step will be.”

The diplomats stressed that Pyongyang’s most pressing problem is the rapidly deteriorating economic situation, particularly its acute shortage of oil. Many factories are running at 30% to 40% of capacity and operate in darkness to save electricity. Some residents shivered in frigid homes during the coldest months because of the shortage of heating fuel, and a food shortage is worsening, they said.

“The economy is in very, very, very bad shape,” one of the diplomats said. “The wheels are just going slower and slower.”

Jameson reported from Seoul and Watanabe from Tokyo.