North Korea cuts all ties with South

North Korea broke off all communications with South Korea yesterday and threatened retaliation for alleged violations of its sea border as tensions on the peninsula rose over the sinking of a South Korean naval ship.

In a series of angry gestures the North also announced the expulsion of South Korean workers from a joint industrial zone, the last major cooperative project between the two nations. The move came after months of deteriorating relations between Kim Jong Il, the North Korean leader, and the Government of Lee Myung Bak, the South Korean President.

“The Committee for the Peaceful Reunification of Korea . . . formally declares that from now on it will put into force the resolute measures to totally freeze the inter-Korean relations, totally abrogate the agreement on non-aggression between the North and the South and completely halt the inter-Korean co-operation,” the state-run Korean Central News Agency (KCNA) said. “There is no need to show any mercy or patience for such confrontation maniacs, sycophants and traitors and wicked warmongers as the Lee Myung Bak group.”

The day after imposing a trade freeze with Pyongyang the South said that it would restart propaganda broadcasts by radio and loudspeaker across the tense land border with the North. In a display of combined military strength joint exercises between South Korean and US forces are planned this week.

“These days the South side is perpetrating undisguised intrusions into the maritime boundary line of our side in the waters of the West Sea of Korea, driving the situation there to the brink of explosion,” KCNA said. “Should the South side’s intrusions into the territorial waters of our side continue, the Democratic People’s Republic of Korea will put into force practical military measures to defend its waters.”

The South Korean Defence Ministry denied any incursions but the two sides do not agree on where their maritime border lies. In the 60 years since the outbreak of the Korean War the North has frequently made bellicose threats against the South, but the inferiority of its military compared with the joint US-South Korean forces means that it is unlikely to launch an all-out war.

The current situation represents a high point in recent tensions. Since the North’s apparent sinking of a South Korean naval ship last month, years of slow and often painful diplomatic progress have been all but wiped out.

There was no official confirmation of a report that Mr Kim had put his million-strong military on combat readiness. North Korea Intellectual Solidarity, a group of North Korean defectors in Seoul, said that the alert was ordered last Thursday when an international investigatory team issued a report accusing Pyongyang of sinking the corvette Cheonan, with the loss of 46 lives.

Seoul has responded to the attack by cutting off trade with the North and banning its ships from using its sea lanes. The Korea Institute for National Unification, which is supported by the South Korean Government, said that the sanctions would cost Pyongyang $250 million (£173 million) a year.

The South announced that it would reinstall scores of propaganda loudspeakers and towering electronic billboards along the heavily armed land border to send messages inviting defectors. The North will no doubt respond by restoring its own batteries of deafening loudspeakers and huge billboards bearing insulting slogans.

President Medvedev of Russia telephoned Mr Lee to urge restraint on all sides. Ban Ki Moon, the UN Secretary-General, said that he expected the UN Security Council to take action against North Korea, but the indications were that China would veto any but the mildest condemnation.

Jiang Yu, a Chinese government spokeswoman, said that peace and stability on the peninsula and in the region were in the interests of all parties. China would not tolerate any actions that would disturb that peace. “We hope that all parties concerned stay calm and exercise restraint,” she added.

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North Korea 'on combat alert'

North Korea has reportedly ordered its armed forces to be placed on combat alert amid rising tensions on the Korean peninsula following the March 26 sinking of a South Korean naval vessel.

The order came directly from North Korea's leader, Kim Jong-il, South Korea's Yonhap news agency said on Tuesday, quoting sources inside the North.

There was no reference to the order on North Korean media monitored in the South, nor any immediate comment from South Korean officials.

North Korea has previously threatened "all-out war" in response to any moves to punish it for the sinking.

The report comes a day after the United Nations secretary-general joined the US in ratcheting up pressure on North Korea, calling for action from the Security Council in response to the alleged torpedo attack on a South Korean patrol ship that left 46 sailors dead.

Speaking at UN headquarters in New York, Ban Ki-moon said there was "overwhelming and deeply troubling" evidence that Pyongyang was behind the March 26 sinking of the Cheonan off the west coast of the Korean peninsula.

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South Korea, World Look to China to Warn North Over Ship Sinking

Pressure is mounting on China to reprimand North Korea over the fatal sinking of the South navel vessel last month. South Korea and the United States are calling for stern international action against North Korea for torpedoing a South Korean warship.  But Beijing, a North Korean ally, has not joined them, despite pressure from Washington.

Seoul says it is freezing trade with North Korea and will seek U.N. action for the killing of 46 sailors in the March incident.  And U.S. Secretary Hillary Clinton, visiting Beijing this week, said she has been in intense discussions with the Chinese leadership on the issue.

But Daniel Pinkston, a North Korea expert with the International Crisis Group, believes many people overestimate Beijing's influence over North Korea and its leader Kim Jong Il.

"I certainly think they are not pleased with the incident but as far as taking any strong punitive measures against North Korea, it Is probably unlikely," said Pinkston. "I think the Chinese government will view that as counter productive, so I am not that hopeful for a strong U.N. Security Council resolution, or the introduction of any draft resolution, because China will try to water it down or veto it," Pinkston said.

China welcomed Kim Jong-il on a rare visit earlier this month but the substance of his talks with Chinese leaders was not revealed.  China is a major source of food and fuel for its impoverished neighbor.

For nearly seven years, the Chinese government has taken a leading role in multinational negotiations to end North Korea's nuclear arms programs.  But the talks have been stalled for more than a year and North Korea has tested two nuclear weapons.

Beijing has close economic ties with North Korea.  Moreover, many experts on northeast Asia relations say China is very concerned about a possible collapse of the Pyongyang government.  That could send a flood of refugees across its border with North Korea, and possibly lead to a united Korean peninsula dominated by a government that is friendly to the United States.

The tension over the Korean peninsula is affecting broad economic and security talks with the United States going on in Beijing this week.  U.S.-Sino relations remain fragile after Beijing and Washington clashed for months over a range of issues including Tibet and trade imbalances.

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Clinton Calls for China Cooperation on North Korea

May 24 (Bloomberg) -- U.S. Secretary of State Hillary Clinton praised China for supporting tougher United Nations sanctions against Iran, and said the same cooperation was necessary against North Korea.

“North Korea is also a matter of global concern,” Clinton said at the opening of the Strategic and Economic Dialogue in Beijing. “We must work together again to address this challenge.”

The U.S. is seeking China’s backing to punish North Korea for the deadly attack on a South Korean ship in March, an issue that has eclipsed other items on the agenda for the high-level talks. South Korea today said it will seek UN action against North Korea after a report concluded last week that it was behind the torpedoing of a warship that killed 46 sailors.

China is North Korea’s closest ally. Clinton yesterday met with senior Chinese officials to convey how seriously the U.S. views developments on the Korean peninsula, an Obama administration official said. The U.S. and its allies have not faced such a serious regional incident in decades, the official said, speaking on condition of anonymity.

In today’s remarks, Clinton called for cooperation that creates “win-win solutions, rather than zero-sum rivalries” with China.

Hu’s Warning

Chinese President Hu Jintao, speaking minutes later, echoed the call for cooperation on issues of security, financial matters and climate change, while cautioning against unilateral foreign policy decisions.

“We do not believe that world affairs should be determined by one or two individual countries,” he said.

Hu also reminded his guests that China and the U.S. have fundamental differences over Tibet and Taiwan, both of which have caused bilateral friction. President Barack Obama’s hosting of Tibetan spiritual leader the Dalai Lama in February and his decision to sell arms to Taiwan, regarding by the Beijing government as a reengage province, drew rebukes from China.

“We should respect each other’s core interests and major concerns,” Hu said. “Sovereignty, independence and territorial integrity are a country’s most basic rights recognized by the norms governing international relations.”

Hu spoke to the largest delegation of U.S. Cabinet members and sub-Cabinet members ever to travel to China, part of an Obama Administration effort to forge a new relationship between the two nations. The two-day Strategic and Economic Dialogue will examine areas of mutual concern and cooperation from global financial stability to North Korea.

Hu made it clear that the China-U.S. relationship was on new footing, referring to “new relations for a new century,” while warning of negative consequences if ties fray.

“Should China and the United States not be able to build and develop such unified relations, the chance for peace will be seriously undermined in the 21st century,” he said.

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South Korea seeks U.N. support to punish North

South Korea said on Monday it would punish North Korea for sinking one of its naval ships, with China coming under heavy pressure to rein in the hermit state as tension on the peninsula rises to its highest in years.

In a nationally televised speech, South Korean President Lee Myung-bak said he would take the issue to the U.N. Security Council whose past sanctions are already sapping what little energy the ruined North Korean economy has left.

Fears the escalating rhetoric could turn into open conflict on the divided Korean peninsula has weighed on investors in the South, Asia's fourth biggest economy.

The won fell more than two percent to an eight-month low in early trading, though it later recovered a little with traders seeing the rhetoric as falling well short of any threat of a military response.

"I solemnly urge the authorities of North Korea ... to apologise immediately to the Republic of Korea (South Korea) and the international community," President Lee Myung-bak said in a nationally televised address.

Late last week, a team of international investigators accused North Korea of torpedoing the Cheonan corvette in March, killing 46 sailors in one of the deadliest clashes between the two since the 1950-53 Korean War.

North Korea did not response immediately to Lee's speech. But just hours after he spoke, it issued a statement by its foreign ministry saying the country had the right to expand its nuclear deterrent.

It has long argued that it has been forced to develop atomic weapons in the face of what it says are threats to attack by South Korea and the United States.

"North Korea's goal is to instigate division and conflict," said Lee, speaking from the country's war memorial in the capital Seoul. "It is now time for the North Korean regime to change."

His government banned all trade, investment and visits with North Korea.

In what may alarm Pyongyang as much as anything, its wealthy neighbour said it also plans to reduce the number of workers in a joint factory park just inside the North which has long been an important source of income for the North Korean leadership.

Much of the diplomatic focus will be on China, the only major power to support North Korea and which earlier this month -- to the annoyance of the South -- hosted a rare overseas visit by the North's sickly looking leader Kim Jong-il.

U.S. Secretary of State Hillary Clinton, on a visit herself to Beijing, urged China to cooperate on the challenge posed by the sinking of the Cheonan.

The United States is pressing China to join international condemnation of North Korea.

Beijing has so far avoided joining in the blame of Pyongyang, saying it will make its own assessment of why the ship sank.

Analysts say Beijing is terrified of any action that might cause the already shaky North to collapse, sending chaos across into its territory and, perhaps even more worrying, leading to U.S. troops moving up the peninsula right to its border.

That means China is likely to be reluctant to support more sanctions against the North, whose economy is already in tatters.

TRADE ALREADY FALLING

A South Korean government report said the North's foreign sanctions-hit trade fell 10 percent last year and could fall further this year, forcing it to depend even more on China to prop up its economy.

Lee said the South reserved the right to defend itself if Pyongyang wages aggression. The North said much the same to its neighbour last week when it denied involvement in the sinking.

Local financial markets took some relief from Lee's comments which steered clear of any suggestion of military retaliation.

South Korean stocks and the won slightly cut losses while treasury bond futures extended gains as traders played down the chance the tensions with the North would develop enough to spark a massive capital flight.

"It's not that tensions with North Korea will be cleared up in one day but the speech was worded in such a way as to help reduce investors' jitters," said Yoon Yeo-sam, a fixed-income analyst at Daewoo Securities.

Kwak Joong-bo, a market analyst at Hana Daetoo Securities, echoed that view.

"South, North tension is certainly not positive, but given historical trends, losses that markets suffer over this will be brief, unless a drastic situation takes hold. By drastic, I mean war. I do not think war is likely though," he said.

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U.N. body probes North Korea's possible truce violation

The United Nations Command (UNC) has launched an investigation into whether North Korea violated the Korean War armistice by sinking one of the South's naval ships, the U.N. body said on Saturday.

North Korea denounced the probe as a "bogus mechanism."

On Thursday, the South announced the results of an investigation which concluded a North Korean submarine had in March fired a torpedo that sank the Cheonan corvette, killing 46 sailors.

The UNC said in a statement it had convened a special team to review the findings of the investigation and to "determine the scope of the armistice violation" that occurred with the sinking of the Cheonan.

The team, which includes 11 countries -- Australia, Canada, Denmark, France, New Zealand, the Republic of Korea, Turkey, the United Kingdom and the United States, Sweden and Switzerland -- would report their findings to the United Nations, it added.

North Korea has denied the sinking accusation and said it is ready to tear up all agreements with the South, with which it remains technically at war under a truce that ended fighting in the 1950-53 Korean War.

"It is the stand of the North side that there is no justification to plug such bogus mechanism as the 'Military Armistice Commission' into the case as it was faked up by the South side to be an issue between the North and the South from its outset," the North's National Defense Commission was quoted as saying by the communist state's official KCNA news agency.

Pyongyang said on Saturday it wanted to send its own investigators across the border, repeating that it would like to make its own assessment of the South Korean investigation.

South Korea's Defense Ministry officials said the government would reject the request.

INTERNATIONAL REPONSE

South Korea said after a rare emergency security meeting on Friday it would respond prudently to the sinking of Cheonan, while Washington has called for an international response.

Lee is expected to announce his response early next week.

An international response could range from fresh U.N. Security Council sanctions on North Korea, although those might be opposed by China, to a statement of condemnation by the world body.

U.S. Secretary of State Hillary Clinton is currently visiting North Asia, where Pyongyang's sinking of the Cheonan will top the agenda. She will visit Seoul next week.

Pyongyang has warned the peninsula was being driven to war.

North Korea has often threatened to attack Seoul but most analysts say that, in the face of a much better equipped South Korean army backed by some 28,000 U.S. troops on the peninsula, any major confrontation would be suicidal for Pyongyang.

South Korea has repeatedly said it would not strike back at the North, aware that would frighten away investors already jittery about the escalating tension on the divided peninsula.

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Dennis Blair

WASHINGTON - National Intelligence Director Dennis Blair is resigning under pressure from the White House, ending a tumultuous 16-month tenure marked by intelligence failures and spy agency turf wars.

Blair, a retired Navy admiral, is the third director of national intelligence, a position created in response to public outrage over the failure to prevent the Sept. 11, 2001, terrorist attacks.

His departure underscores the disorganization inside the Obama administration's intelligence apparatus, rocked over the past six months by a spate of high-profile terror attacks that revealed new national security lapses. And it comes two days after a stark Senate report criticized Blair's office and other intelligence agencies for new failings that, despite a top-to-bottom overhaul of the U.S. intelligence apparatus after 9/11, allowed a would-be bomber to board a Detroit-bound airliner on Christmas Day.
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In a message Thursday to his work force, Blair said his last day would be May 28.

"It is with deep regret that I informed the president today that I will step down as director of national intelligence," Blair said.

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Dennis C. Blair

Dennis C. Blair will resign Friday as the nation's intelligence director after a tenure marred by the recent failures of U.S. spy agencies to detect terrorist plots and by political missteps that undermined his standing with the White House.

Blair, a retired U.S. Navy admiral, was pushed out 16 months after he became President Obama's surprise pick to be the nation's third director of national intelligence. His departure is likely to renew debate over whether the DNI position, a daunting job created amid sweeping intelligence reforms after the Sept. 11, 2001, attacks, is fundamentally flawed.

Obama praised Blair's integrity in a prepared statement and said that under his leadership the nation's intelligence services had "performed admirably and effectively at a time of great challenges to our security."

Blair's offer to step down came during a phone conversation with Obama on Thursday in which the president said he planned to put someone new in the director position, according to an official familiar with the exchange. Blair's exit creates a critical national security vacancy at a time when U.S. spy agencies are under pressure to step up their defenses against emerging terrorist threats.

His departure had been rumored in Washington for months, but the nature of his resignation -- without a replacement ready to be named -- suggested a lack of coordination.

The U.S. official, who spoke on the condition of anonymity to discuss internal deliberations, said Obama had first raised the possibility of replacing Blair in discussions with him earlier this week. The White House had indicated a preference that Blair stay in the job until a successor could be named. But Blair refused after learning that the president had decided to look for a new director, the official said.

Blair issued a statement saying that it was "with deep regret that I informed the President today that I will step down." He added that during the Obama administration, U.S. spy agencies had become "more integrated, agile, and representative of American values." Blair becomes the highest-ranking member of the administration to resign.

Current and former U.S. officials said the White House had discussed the position with former senator Chuck Hagel (R-Neb.), who serves as co-chair of Obama's intelligence advisory board; James R. Clapper, a retired Air Force lieutenant general serving as undersecretary of defense for intelligence; and John Hamre, a former deputy secretary of defense who leads the Defense Policy Board.
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Clapper is a leading candidate to replace Blair, a senior White House official said Thursday night, speaking on the condition of anonymity because the search continues. Officials said Hagel told the White House he would not be interested in the position. The former senator was abroad and could not be reached for comment.

Blair had been charged with carrying out Obama's campaign pledge to move the country away from controversial programs -- including the CIA's use of harsh interrogation methods -- that administration officials argued had damaged the nation's standing around the world. But much like his predecessors, Blair struggled to gain traction in a position that is widely seen as lacking adequate authority to oversee an often fractious community of 16 spy services.

Blair sometimes made public remarks that revealed his frustration with the way the intelligence community functions, and that were seen as embarrassing to the administration.

In January, Blair questioned the administration's failure to use a new team of specially trained interrogators to question the suspect in the attempted bombing of a Detroit-bound airliner on Christmas Day. The unit was created for such scenarios, Blair said in Senate testimony, adding, "And duh . . . the decision was made on the scene."

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South Korea & North Korea

SEOUL -- South Korea declared Thursday that North Korea deliberately sank a South Korean warship two months ago, as investigators revealed major sections of a North Korean torpedo found last week near the site of the sinking.

The investigators said the torpedo parts match the design of one that North Korea advertises and exports to overseas customers. Some of the parts also match those in a North Korean torpedo that South Korea recovered several years ago.

"The evidence points overwhelmingly to the conclusion that the torpedo was fired by a North Korean submarine," the investigators said in a statement. "There is no other plausible explanation."

A dredge ship found many of the torpedo parts last Friday, including propellers, its propulsion motor and steering section. A marking inside the propulsion system reads "No. 1" in Korean lettering and, investigators said, is consistent with markings in a North Korean torpedo that the South Korean military obtained several years ago.

The investigators said that surveillance photography showed that several small North Korean submarines and a support ship were gone from their base for about five days around March 26. South Korea said it confirmed with neighboring countries, including China, that their submarines were at their home bases on March 26.

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