The US says it will not weaken its deterrent against the North
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The US and South Korea have agreed to relocate all of the US troops based in the South Korean capital, Seoul, to a new base further south.
The US said it would move the 8,000 troops to Pyongtaek, 80km (50 miles) to the south, by December 2008.
The Pentagon said both sides also agreed to eventually relocate 14,000 troops currently based between Seoul and the North Korean border.
There are 37,000 US troops stationed in South Korea.
However the US has already said it plans to redeploy 12,500 troops to other countries by 2006, as part of a global review of its forces.
The Pentagon says it will continue to defend South Korea from any threat from the North, insisting that longer range weapons and better technology will compensate for the reduction in numbers.
Long alliance
US forces have been based at Yongsan, in Seoul, since World War II, expanding their presence after the 1950-53 Korean War.
Their forward position puts them in range of North Korean artillery, and US officials have said that pulling troops back south of the capital would strengthen the military's hand.
No timetable has been given for the redeployment of the 14,000-strong 2nd Infantry division, which is based along the Demilitarized Zone (DMZ) with North Korea.
Last month, South Korea announced four candidates to replace the northern city of Seoul as the nation's capital.
Government and administrative functions will be moved, and possibly parliament and the supreme court, in a move scheduled for completion in 2030.
The potential new sites are all in the centre of the country. It is hoped the move will ease regional rivalry and re-balance Seoul's economic dominance.