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DATE=11/19/98 TYPE=CORRESPONDENT REPORT NUMBER=2-241870 TITLE=N. KOREA / U-S (L-ONLY) BYLINE=JOHN LARKIN DATELINE=SEOUL CONTENT= VOICED AT: INTRO: A U-S ENVOY, IN SEOUL AFTER TWO DAYS OF TALKS IN NORTH KOREA, SAYS THE UNITED STATES HAS FAILED IN AN ATTEMPT TO CONVINCE PYONGYANG TO ALLOW INSPECTIONS OF SUSPECTED UNDERGROUND NUCLEAR SITES. JOHN LARKIN REPORTS FROM SEOUL THAT THE STALE-MATE POSES A SERIOUS THREAT TO A 1994 DEAL FREEZING THE COMMUNIST NORTH'S NUCLEAR PROGRAM. TEXT - WASHINGTON'S POINT-MAN ON NORTH KOREA, CHARLES KARTMAN, WARNED THURSDAY THAT HIS TALKS IN PYONGYANG FAILED TO NARROW THE GAP BETWEEN THE TWO SIDES ON THE INSPECTIONS ISSUE. HE SAID THE 1994 DEAL, UNDER WHICH THE NORTH GETS TWO SAFE NUCLEAR REACTORS AND OIL DELIVERIES, IN RETURN FOR FREEZING WORK ON FACILITIES CAPABLE OF PRODUCING WEAPONS-GRADE PLUTONIUM, WAS IN DANGER OF UNRAVELING. THE U-S SUSPECTS THE NORTH IS VIOLATING THE AGREEMENT BY BUILDING A NEW UNDERGROUND NUCLEAR FACILITY NEAR YONGBYON, WHERE AN OLDER REACTOR WAS SHUT DOWN, AFTER THE AGREEMENT WAS SEALED. BUT PYONGYANG INSISTS THE FACILITY HAS A CIVILIAN PURPOSE AND IS DEMANDING CASH FROM WASHINGTON IN EXCHANGE FOR PERMISSION TO INSPECT THE SITE. MR KARTMAN, WHO IS WASHINGTON'S SPECIAL ENVOY TO NORTH KOREA, ISSUED HIS STERN WARNING DURING A BRIEFING AFTER HIS RETURN FROM 12-HOUR TALKS IN PYONGYANG, WHICH HE DESCRIBED AS "INTENSIVE." HIS WAS THE HIGHEST-LEVEL U-S DELEGATION TO VISIT PYONGYANG SINCE 1994, BUT WASHINGTON DID NOT EXPECT ANY MAJOR BREAKTHROUGHS. STATE DEPARTMENT SPOKESMAN JAMES RUBIN SAYS THAT MR.KARTMAN'S PURPOSE WAS TO PERSUADE THE NORTH THAT WASHINGTON TOOK THE ISSUE VERY SERIOUSLY. MR. RUBIN SAID THE KARTMAN DELEGATION HAD REJECTED PYONGYANG'S DEMAND FOR CASH COMPENSATION, BUT THE TWO SIDES AGREED TO MEET AGAIN. HE REFUSED TO SAY HOW MUCH MONEY THE NORTH HAD DEMANDED IN EXCHANGE FOR INSPECTIONS. (SIGNED) NEB/JL/FC/PLM 19-Nov-98 3:11 AM EST (0811 UTC) NNNN Source: Voice of America .