N. Korea Nears OK on Nuclear Checks : Diplomacy: In secret talks with U.S., Pyongyang says it will allow inspections. But details need to be worked out with international agency. Gap with South Korea remains.

North Korea has made significant new concessions to the United States, agreeing to allow international inspections of all seven of the nuclear facilities it has acknowledged inside its country, according to Clinton Administration and South Korean officials.

The concessions, made Monday in secret U.S.-North Korean talks in New York City, could open the way for a diplomatic resolution of the prolonged crisis over Pyongyang’s nuclear program.

Clinton Administration officials have said that the United States and its allies might resort to sanctions or an oil embargo if diplomacy failed.

“In general terms, it’s quite hopeful,” said one official familiar with the talks. A senior State Department official said the two sides “are getting close to the last step” in the current round of negotiations.

The secret talks between the United States and North Korea have not been concluded because the two sides remain stuck on a final stumbling block: The United States has insisted that North Korea also exchange special envoys with South Korea, and the Pyongyang regime is still resisting this condition.

Also, even though North Korea has told the United States that it will allow inspections of its nuclear sites, it still must reach a separate agreement with the International Atomic Energy Agency on the terms and logistics for the inspections.

Until last Monday, North Korea had refused to permit international inspections of the country’s two most important nuclear installations--the nuclear reactor and the reprocessing facility at Yongbyon.

Western nuclear specialists believe that the two facilities have been used to make enough weapons-grade plutonium for at least one or two nuclear bombs.

Instead, before Monday, the Pyongyang regime had said it would allow IAEA inspections at five other, less important nuclear installations.

It had said it would permit only the replacement of film, seals and batteries on monitoring devices--and not human inspections--at the two Yongbyon facilities.

At Monday’s meeting, North Korea yielded and said it will also allow international inspections of the two Yongbyon facilities.

“The general tone of the meeting was that the North Koreans were forthcoming on the IAEA issues,” one official confirmed.

The Clinton Administration on Tuesday held a meeting for all its top foreign-policy officials to discuss the North Korean offer. It has also been consulting with the two key U.S. allies, South Korea and Japan.

If all the current stumbling blocks are resolved, the way will be clear for IAEA inspections of all of North Korea’s nuclear installations.

In exchange, the United States and South Korea would agree formally to give up their annual Team Spirit joint military exercises.

And the United States and North Korea would then move forward to a third, broader round of diplomatic negotiations.

Clinton Administration officials have said that at these future talks, the United States would offer incentives, such as a normalization of relations and economic benefits, in exchange for steps by North Korea to give up its nuclear program.

In an interview with The Times last week, Secretary of State Warren Christopher said the aim of U.S. policy is “to try to ensure that they (the North Koreans) do not have a nuclear program--to first assess whether or not they do have one, through inspections, and then to try to take steps to ensure that the whole (Korean) peninsula is a non-nuclear peninsula.”

Even if North Korea permits IAEA inspections of all of its officially declared nuclear sites, including the plant and reprocessing facility at Yongbyon, this will still leave open for the future the most sensitive issue of all--the IAEA’s desire to conduct “special inspections,” similar to those it has been carrying out in Iraq since the end of the Persian Gulf War.

In normal inspections, like the ones now under discussion for Yongbyon, the IAEA visits places such as power plants that the host government itself has acknowledged are engaging in nuclear activity.

In special inspections, the IAEA visits sites of its own choosing, even if the host government has not said that any nuclear work is being carried out there.

The IAEA wants to carry out special inspections at two sites where it believes North Korea has hidden waste materials produced when it secretly reprocessed plutonium. Inspections at these waste sites could provide crucial information about the quantity of weapons-grade fuel North Korea has produced, and this could pave the way for demands that Pyongyang give up this material.

“Ultimately, the United States and the international community will insist on special inspections,” a senior State Department official said. “That is what we are holding out for in the medium term.”

The crisis over the North Korean nuclear program began in February, when the IAEA told Pyongyang that it wanted to carry out special inspections of the two waste sites.

North Korea countered by announcing in March that it would pull out of the Nuclear Non-Proliferation Treaty, the international accord that provides the basis for IAEA inspections.

During two rounds of talks last summer with the United States, North Korea suspended the threat to withdraw.

However, since then it has been balking at opening up its nuclear installations to international inspections.

On paper, these inspections are legally required by the non-proliferation treaty. But the regime of President Kim Il Sung has resisted so strongly that the Clinton Administration has had to negotiate for much of the last year and has given up the Team Spirit exercises to induce North Korea to agree to meet these legal obligations.

The Clinton Administration has been willing to negotiate because its willingness to use force to get North Korea to comply with the law is more restrained than it was in the case of the Iraqi invasion of Kuwait.

Any military action against North Korea could prompt Pyongyang to retaliate with missile or artillery attacks that could devastate Seoul and other parts of South Korea.

Early today, U.N. Secretary General Boutros Boutros-Ghali crossed the Korean border for two days of talks in the north aimed at defusing the crisis. He was the first U.N. chief to cross between the two Koreas, which are still technically at war.