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North Korea presents nuclear report

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.

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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 neighbours 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.

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

Hadley said Pyongyang had now met the condition -- a U.S. finding it had not supported terrorism in the past six months -- needed to get off the U.S. blacklist, which takes 45 days.

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But, when a reporter asked whether Bush now considered Pyongyang an ex-member of the “axis,” Hadley said: “We have a lot of problems with North Korea.” He cited human rights and threats to neighbours from ballistic missiles and conventional forces as well as from its nuclear efforts.

Removal from the terrorism list could relax some trade restrictions and eventually let the impoverished country work with the World Bank. But the immediate economic benefit is expected to be minimal, experts said.

Bush and his aides stressed the symbolic nature of the U.S. concessions. The outgoing president, who leaves office in January, has come under pressure from many conservatives not to be seen as compromising on North Korea five months before a presidential election in which national security issues will play a big part.

“This is a big shame. This is an agreement that almost entirely benefits North Korea. They’ve gained enormous international political legitimacy ... while giving up essentially nothing in return,” said John Bolton, a former U.S. envoy to the United Nations under Bush and now a harsh critic.

Hadley said easing sanctions was “relatively minor” and if Pyongyang failed to fulfil its obligations the United States could seek to reimpose them or push for new ones.

U.S. financial sanctions aimed at thwarting North Korean money laundering, illicit financing activities and weapons proliferation will stay in effect, a Treasury spokesman said.

Experts said the declaration was positive but left deep uncertainties over who will make further concessions and how much other countries can trust Pyongyang.

Despite that, U.N. Secretary-General Ban Ki-moon said North Korea’s declaration followed by “reciprocal actions” by the United States “are important steps forward.”

China, the closest Pyongyang has to an ally, hosted talks that last year secured a deal offering North Korea energy, aid and diplomatic incentives in return for disabling its main nuclear facility and unveiling past nuclear activities.

“In order to verify the plutonium number that the North Koreans have given, we have been given documents, but we also are expecting access to the reactor core, to the waste pool,” U.S. Secretary of State Condoleezza Rice said in Japan.

The latest phase of the nuclear disarmament deal had been due for completion by the end of 2007 but was delayed by disputes over money, aid and the contents of the declaration. A new round of six-party talks is expected soon.

Additional reporting by David Morgan and Paul Eckert in Washington, Louis Charbonneau at the United Nations, Chris Buckley in Beijing, Susan Cornwell in Kyoto, and Jack Kim in Seoul; Writing by Matt Spetalnick and Jeremy Laurence; Editing by David Storey and Patricia Zengerle