South Korea calls on North to search for war dead

South Korean President Lee Myung-bak delivers a speech to the nation at the presidential Blue House in Seoul January 4, 2010.

SEOUL (Reuters) - South Korea's president proposed a humanitarian project with rival North Korea on Monday under which the two states would cooperate in repatriating remains of tens of thousands of soldiers killed during the 1950-53 Korean War.

The reclusive North allowed U.S. military teams into the country for several years to search for remains of U.S. soldiers killed during the war in a bit of rare cooperation that went on despite difficult diplomatic times.

"South Korea will not forget those who gave their lives on foreign soil," Lee Myung-bak said in a New Year's address.

Lee also repeated a call for North Korea to return to stalled nuclear disarmament talks and said he wanted a new chapter in cooperation between the states, technically at war because their conflict ended with a cease fire and not a formal peace treaty.

He said the recovery project would be an appropriate way to mark the 60th anniversary of the start of the war in which U.S.-led U.N. forces and South Korean troops fought North Korea and China.

"This can only come out of trust between the two countries. It is also a problem that will likely be solved with money," said Kim Yong-hyun, an expert on the North at Dongguk University.

There are about 39,000 soldiers from the South killed during the war whose remains are thought to be in North Korea, the Defense Ministry said. The two states have not had a formal joint repatriation project before.

Destitute North Korea, angered at Lee's moves to suspend massive handouts until Pyongyang ends its atomic ambitions, had cut ties with the South Korean leader after he took office about two year ago. Last year, it warmed to Seoul in what analysts saw as an attempt to win aid for its battered economy.

The two Koreas position more than 1 million troops near one of the world's most militarized borders, while the United States keeps about 28,000 soldiers in the South to support its military.

Conflict between the two Koreas would inflict severe damage to the two states and devastate the economies of North Asia, which make up one-sixth of the global economy.

JPAC, the U.S. unit charged with finding remains of war dead, sent 33 missions to North Korea from 1996 to 2005, leading to the identification of more than 20 sets of remains, U.S. military officials said.

The United States in 2005 ended the recovery missions by the Joint POW/MIA Accounting Command as tensions were rising in nuclear negotiations with North Korea. There are about 8,100 U.S. servicemen not accounted for from the Korean War, JPAC said.

(Editing by Alex Richardson)