North Korea and the United States say they're moving closer to ending the dispute over inspection of nuclear facilities to ensure the Pyongyang government is not making atomic weapons.

The comments by the two sides were the most promising sign to date that a peaceful resolution may be possible in a conflict seen by some as the most dangerous international issue facing President Clinton.The Central Intelligence Agency believes the North Koreans have one or two atomic bombs, although there is widespread disagreement over whether they can deliver the weapons. The issue has prompted fears of a nuclear arms race in northeast Asia.

Also a South Korean official said the United States and North Korea have virtually agreed on "a package deal" to resolve the dispute, a news report in Seoul said Friday.

The national Yonhap news agency, quoting a senior foreign ministry official, said under the deal, the North is expected to reopen its nuclear facilities to international inspections in January.

"The two sides could not reach full agreement because of a couple of problems but those remaining problems are insignificant and are not expected to be obstacles," Yonhap quoted the official as saying.

Yonhap said the United States and North Korea would hold another meeting early next week to seal the "package deal" that also calls for Washington to improve political ties with Pyongyang.

State Department spokesman David Johnson on Thursday reported that the administration has "moved closer" to meeting its objectives in talks with the North Koreans and that additional discussions are expected soon.

In Pyongyang, an unidentified foreign ministry official was quoted by the official Korean Central News Agency as saying a meeting Wednesday at the United Nations led to a "breakthrough."

He is reported to have said that the United States indicated a willingness to meet a longstanding North Korean demand for an end to joint U.S.-South Korean military exercises, usually held each year in March.

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In addition, he reportedly said that North Korea would allow limited international inspections of nuclear facilities and that full access was subject to negotiation.

Johnson reaffirmed that the United States seeks North Korean acceptance of International Atomic Energy Agency inspections at seven nuclear facilities. Another goal, he said, is a serious North-South dialogue on the nuclear issue.

"As a result of the most recent talks, we believe we have moved closer to those objectives," Johnson said.

The unidentified North Korean official went further, asserting that "through the latest contact, the sides removed a series of stumbling blocks . . . and made a breakthrough," the North Korean news dispatch said.

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