South Korea's president on Monday dismissed a report that North Korea has secretly built another plutonium production plant and expressed concern that such media accounts could hurt his country's economy.
Meanwhile, a senior South Korean official predicted a possible breakthrough in the nuclear standoff, saying the United States, China and North Korea will hold talks in Beijing "quite soon."
The nations are "in the final stage of arranging a new meeting," said Ra Jong-il, President Roh Moo-hyun's national security adviser.
Crisis is not a word the Bush administration likes using to describe its confrontation with North Korea, but the escalating nuclear standoff is clearly of grave concern to the White House, reports CBS News White House Correspondent Bill Plante.
Quoting unnamed U.S. and Asian officials with access to the latest intelligence on North Korea, the New York Times reported Sunday that strong evidence has emerged in recent weeks that the communist state has built a second, secret plant for plutonium, a key material for nuclear bombs.
Roh was told by aides Monday that the Times report was "low in reliability," said Kim Man-soo, Roh's deputy spokesman.
"The president expressed concern about the phenomenon of unclear and groundless media reports throwing cold water on our economy," Kim said.
South Korean experts said North Korea would find it hard to secretly build another plutonium production plant. Yet they did not rule it out.
"Concluding that North Korea has a new, second plutonium plant is stretching it way too much," Roh's national security adviser said in an interview with Seoul's CBS Radio.
But author Don Oberdorfer, who has watched North Korea's past behavior, believes the standoff is both urgent and serious.
"It's getting more dangerous every day, and I don't think the United States or its allies are showing the kind of urgency that the situation requires," he said.
If true, a report that North Korea has built a second plant for producing weapons-grade plutonium could complicate diplomatic efforts to seek the verifiable dismantling of Pyongyang's nuclear facilities. It also poses a dilemma for President Bush if diplomacy fails and he is forced to consider military action.
Even if talks take place to check North Korea's nuclear ambitions, no quick result is expected. On Monday, North Korea said unless Washington "legally committed itself to nonaggression," it would not give up its nuclear programs.
"The nuclear issue between the (North) and the U.S. is a very acute matter of 'who beats whom.' Therefore, there can be no unilateral concession or compromise forced by one side. It can be settled only through negotiations based on the principles of fairness, equality and trust," said Pyongyang's official news agency KCNA.
In the past week, China, a longtime ally and key aid provider for North Korea, has dispatched its Vice Foreign Minister Dai Bingguo to Pyongyang and then to Washington to press for a new round of three-way talks, which will later include South Korea and Japan.
North Korea has demanded one-on-one discussions with the United States, saying the nuclear issue is between Pyongyang and Washington. The United States says the issue is a regional one and wants to include China, Japan and South Korea in five-way discussions.
In the first three-party meeting China hosted in Beijing in April, North Korea said it already had nuclear weapons but it was willing to give up its nuclear programs in return for economic aid and security guarantees. U.S. officials have ruled out a nonaggression treaty with North Korea but said they could consider less formal guarantees.
U.S. and U.N. officials are watching for signs that Pyongyang has begun producing weapons-grade plutonium, a process that emits a kind of krypton gas that U.S. sensors can detect. The Times reported that American officials confirmed that sensors on the North Korean border have detected elevated levels of krypton 85.
But the gas is apparently not emanating from North Korea's known Yongbyon nuclear site, leading American and Asian officials to believe North Korea has secretly built a second plant for producing plutonium, according to the Times.
A senior State Department official, speaking in Washington on condition of anonymity, said there was no hard evidence to back up the idea that there is a secret plutonium processing plant.
"There are suspicions such exists, but no hard evidence," the official said.
This month, North Korea told U.S. officials that it had reprocessed all of its 8,000 spent nuclear fuel rods, a procedure that experts say could yield enough plutonium to make several nuclear bombs within months. U.S. officials are not sure whether North Korea is bluffing.
The nuclear dispute flared in October when U.S. officials said North Korea admitted having a clandestine, uranium-based nuclear program in violation of international agreements.