But the two leaders disagreed over the crucial question of sanctions on the communist state.

Mr Clinton promised increased American trade and investment to help South Korea's troubled economy.

This follows the $5bn in back-up loans already pledged by Washington - part of the $57bn rescue package agreed last year through the International Monetary Fund.

State department correspondent Richard Lister on President Kim's visit

Mr Clinton said he would also support the country's approach to North Korea in what he called a "policy of reciprocity" that would reward the North for efforts toward reconciliation with the South. But he said the United States would not be easing sanctions against Pyongyang.

The South Korean president wants sanctions on North Korea relaxed, arguing that economic engagement could have a moderating effect.

"We have nothing to fear from North Korea," he told a White House press conference. "To induce them to open up will be beneficial to the interest of our two countries."

But the BBC Washington correspondent says there will be little political support for increasing economic contacts without clear evidence that North Korea is willing to change.

Mr Kim is on his first state visit to the United States. A long-time democracy activist, he credits the United States with rescuing him from an assassination attempt orchestrated by South Korea's then military government.