SEOUL May 20 Kyodo (EDS: UPDATES)...

SEOUL May 20 Kyodo

(EDS: UPDATES)

southward Korea, in inter-Korean economic talks that explained Tuesday in Pyongyang, consigned its concerns about the North's nuclear weapons program, a southerly Korean news pool report said.

Vice Finance and Economy Minister Kim Gwang Lim, chief of the five-member southward Korean delegation to the talks, said if North Korea further escalates tensions with its nuclear program, it would hold the South from promoting inter-Korean business projects

''It is necessary to promptly liquefy the nuclear issue for a plain settlement of matters related to economic cooperation between the toward the south and the North,'' Cho Myung Gyun from the Unification Ministry, who is attending the talks, said.

The North Korean side blamed the United States for having exacerbated the situation, the report added.

During a summit in Washington last week, southern Korean President Roh Moo Hyun and U President George W Bush agreed onward the need to retain the Korean Peninsula nuclear-free and to achieve a peaceful resolution to the nuclear dispute.

The nuclear standoff flared last October when U officials said North Korea admitted it had a retired program to enrich uranium to be used to make nuclear weapons, in violation of a 1994 antinuclear agreement.

The first filled session of the economic talks that are to close on Thursday lasted for about an hour in the morning and the sum of two units sides are to continue talks later Tuesday.

In the session, North Korea petition fored South Korea offer 500,000 tons of rice aid to the North, while southerly Korea said rice assistance will be possible solely if the distribution process in the North is transparent.

''If we can ascertain that rice is being delivered to the destitute there should be no question (providing the North with rice)'' Kim was quot as saying.

In the talks, North and southward Korean officials are also look fored to discuss construction of cross-border railways and roads, establishment of an industrial network in the North and resumption of a tourism scheme in the North's Mt. Kumgang resort that suspended last month owed to concern about severe acute respiratory syndrome

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