N.Korea presents nuclear report

By Matt Spetalnick and Jeremy Pelofsky

WASHINGTON (Reuters) - North Korea handed over a long-delayed account of its nuclear activities on Thursday, prompting a still-wary U.S. President George W. Bush to ease some sanctions on a country he once branded part of an "axis of evil."

Bush cautiously welcomed the action but warned North Korea, which tested a nuclear device two years ago, that it faced "consequences" if it did not fully disclose its operations and continue to dismantle its nuclear programs.

"If North Korea makes the wrong choices, the United States and our partners in the six-party talks will respond accordingly," he said in Washington shortly after the declaration was handed over to China.

Responding to an unusual opening by the secretive communist state, Bush took a step toward removing North Korea from a U.S. list of state sponsors of terrorism and issued a proclamation lifting some sanctions under the Trading with the Enemy Act.

Seeking to deflect criticism from hardline critics who accuse him of going soft on North Korea, Bush made clear he would put the onus on Pyongyang to keep its promises.

With the unpopular Iraq war and Iranian nuclear standoff unresolved in the twilight of Bush's presidency, his administration is hoping progress on North Korea can help salvage his foreign policy legacy.

But U.S. officials acknowledged that the North Korean declaration, which came six months after a December deadline, falls short of answering all concerns about Pyongyang's atomic ambitions, especially on past nuclear proliferation activities.

Stephen Hadley, Bush's national security adviser, said the statement reveals the amount of plutonium North Korea has produced but does not detail its nuclear arsenal.

But he said U.S. experts could "do the math" and that issue would be discussed in a further phase of the six-party talks involving Pyongyang's neighbors that yielded this deal.

Bush also welcomed an announcement by North Korea that it would blow up the cooling tower at Yongbyon, its main nuclear complex. In an unprecedented move, North Korea has invited Western media to record the event.

North Korea had already begun dismantling its nuclear facilities after talks among China, Japan, Russia, North and South Korea and the United States.

"This isn't the end of the process, this is the beginning of the process," Bush said, insisting that Pyongyang's latest moves would not in themselves end its international isolation.

He said among other steps North Korea needed to take was a resolution of its differences over abducted Japanese citizens.

'AXIS OF EVIL'

Bush bracketed North Korea, Iraq and Iran in an "axis of evil" after the September 11 attacks in 2001.