U.S. KEY
South Korea's ability to seek a peace treaty is limited because it was not a signatory to the ceasefire that ended the 1950-53 Korean War. U.S.-led forces signed the agreement.
U.S. President George W. Bush has said he is ready to discuss a peace treaty once the reclusive North scraps its atomic arms and so removes one of the region's greatest security threats.
North Korea has stationed most of its 1.2 million-man military near the border with the South, which has about 670,000 troops backed by about 28,000 U.S. troops.
Although South Korea has lived for decades with the military threat, some analysts say its greater fear is that the sudden collapse of Kim's autocratic government would create enough instability to badly damage its economy, Asia's fourth largest.
North Korea's economy has become a shambles under Kim while his neighbour's has surged. Hit hard by U.N. sanctions for its October 2006 nuclear test and massive summer floods, North Korea depends on food and oil handouts.
"South Korea's economic cooperation is aimed at reducing military tension," said Jeong Hyung-gon, an expert at the Korea Institute for International Economic Policy. "A peaceful peninsula has a direct impact on South Korea's economy."
The first summit broke the ice in the two states' Cold War rivalry and launched economic and humanitarian projects.
Officials said Roh might propose new projects to rebuild the North's dilapidated infrastructure and develop joint economic zones in the isolated state where its own dynamic manufacturers could further exploit cheap land and labour.
