Clinton says Korea naval fight won't deter U.S. envoy visit

SINGAPORE (Reuters) - A naval skirmish between the two Koreas will not derail the Obama administration's plans to send its first envoy to Pyongyang to revive dormant nuclear talks, U.S. Secretary of State Hillary Clinton said on Wednesday.

The rival Koreas exchanged gunfire for the first time in seven years on Tuesday. The clash took place near a disputed sea border and left a South Korean vessel pockmarked with bullet holes and a North Korean patrol ship ablaze as it retreated home.

"This does not in any way affect the decision to send Ambassador (Stephen) Bosworth. We think that this is an important step that stands on its own," Clinton told a news conference on the sidelines of an APEC meeting in Singapore.

North Korea has often used military action to force its way onto the agenda of major diplomatic events, and recently caused alarm by announcing increased production of arms-grade plutonium. Yet at the same time, it has also been seeking direct talks with Washington.

"We're obviously hoping the situation does not escalate, encouraged by the calm reaction that has been present up until now," Clinton said.

President Barack Obama is due in Japan later this week to start his first tour through Asia since taking office, and the security threat North Korea poses to the economically vital region will be high on the agenda.

The United States said on Tuesday it had agreed to send Bosworth, its special envoy for North Korea, to the country to hold bilateral talks in the hopes of coaxing Pyongyang back into broader negotiations aimed at ending its nuclear arms program.

South Korea's military was on high alert for another possible incursion but there has been no suspicious activity from the North near the disputed sea border, officials said.

NUCLEAR TALKS

North Korea for nearly a year has boycotted the six-country talks aimed at having it scrap its nuclear program in exchange for aid to rebuild its broken economy and a better diplomatic standing that could help it receive international finance.

Analysts said Washington would not have signed off on the Bosworth visit unless it had assurances Pyongyang would return to disarmament talks.

Few expect the North Korean leader Kim Jong-il to ever give up nuclear weapons, which his state's propaganda machine said have fended off invasion attempts by a hostile United States and are the crowning achievement of his "military-first" rule.

Regional powers are hoping for at least a return to pledges reached in 2005 under a six-way deal where the North resumes taking apart its aging Yongbyon nuclear plant -- the source of its arm-grade plutonium -- and allowing in international nuclear inspectors to verify claims it made about its nuclear program.

South Korean President Lee Myung-bak has tried to prevent Tuesday's clash from harming a recent warming of ties between the Koreas, who are technically still at war because their 1950-53 conflict ended with a cease fire and not a peace treaty.

"We do not want this to be an obstacle in the improvement of South-North Korea relations," Kim Eun-hye, a spokeswoman for the presidential Blue House.

(Writing by Jon Herskovitz; Editing by Jeremy Laurence)