US Secretary of State Colin Powell has made the first high-level contact with North Korea in two years, meeting Foreign Minister Paek Nam-sun on the sidelines of an Asian regional security forum in Brunei.

The exchange comes amid several indications from the normally secretive North that it is looking to improve its frosty relations with the US, Japan and South Korea.

US-North Korean relations

Oct 2000 Madeleine Albright visits Pyongyang Jan 01 Bush takes office and signals policy review Jan 02 Bush names N Korea in "axis of evil" June 02 South and North involved in lethal naval battle July 02 North says it is ready for "unconditional talks" with US, Japan

But in a sign of how unpredictable the North can be, its official media launched a broadside soon before the meeting with Mr Powell, accusing the US of being a "kingpin of evil" and wanting war.

It then accused officials in South Korea of allowing naval vessels to infiltrate into its territorial waters.

North Korea's army said the incident was an attempt by southern military authorities to spoil a new atmosphere of dialogue between the two countries.

Analysts said the accusations would be seen by cynics as further proof that the North wanted better relations to get more aid rather than because of fundamental changes in the Stalinist state.

Mr Powell's meeting with Mr Paek was the highest-level discussion between the two sides since former US President Bill Clinton left office.

Relations have worsened since President George W Bush came to power and announced a policy review, especially after he included North Korea in his "axis of evil" speech in January.

Kim is reported to be implementing changes

Mr Paek also held talks with his Japanese opposite number, Yoriko Kawaguchi, though he did not formally meet South Korean Foreign Minister Choi Sung-hung.

Caution

After meeting with Mr Powell he said: "everything went satisfactorily".

"We have agreed to resume the dialogue between North Korea and the United States," he said, without going into details.

But US officials took pains to stress that the meeting was not prearranged. Mr Powell went into a lounge at the forum and one of his staff let Mr Paek know he was there.

The meeting followed a potentially significant announcement earlier this week, in which North Korea indicated to the Russian foreign minister that it wanted to resume talks with the US and Japan.

There have also been reports that the hard-line communist state is starting to implement widespread reforms to its moribund economy, including freeing up some prices and raising wages.

Analysts say the North wants better relations with the outside world to get increased aid and investment.

As part of the latest diplomatic moves, North and South Korea agreed to hold preliminary talks after the North expressed regret over a fatal naval clash between the two countries in June.

The US is reluctant to institute fuller relations with North Korea until it is clearer whether the latest hints of openness are genuine.

The US also wants to discuss the North's missile programmes and commitment to prevent weapons proliferation, subjects the North has been reluctant to have raised in the past.

Mr Powell and Mr Paek were in Brunei along with foreign ministers from the Association of South-East Asian Nations and others with interests in security issues in the Asian region.