N Korea fury over nuclear 'breach'

By Charles Scanlon BBC correspondent in Seoul

North Korea has accused the United States of deliberately breaching a nuclear agreement between them - and says it wants compensation.

North Korea is angry that the US has pulled out of the power project

An American-backed international consortium last week suspended work on power projects for the North, which were designed to replace its nuclear weapons programme.

The decision in effect suspended the nuclear accord of 1994.

At the time, the US agreed to back the construction of two nuclear power stations for the North if it scrapped its nuclear weapons programme.

The North's party newspaper, the Rodong Sinmun, described the move to pull the plug on the project as overt defiance and demanded compensation.

Security guarantees

North Korea says the project was years behind schedule and the US never had any intention of completing it.

The Bush administration, though, says the North broke the agreement first, by continuing to work on nuclear weapons in secret.

The acrimony over the 1994 agreement casts a shadow over current diplomatic efforts.

The US is preparing to offer security guarantees to North Korea in return for another promise to give up its nuclear ambitions.

The Communist state is expected to demand generous economic benefits as well, while holding out against rigorous verification procedures.

Hawks in Washington say Pyongyang cannot be trusted and fiercely oppose offering rewards.

But others say there is no reasonable alternative to diplomacy and negotiations.