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U.S. PAYING N. KOREANS FOR REMAINS

On a September day about a year ago, a U.S. Army officer pushed a briefcase crammed with $897,000 across a green negotiating table in this truce village that straddles the border of North and South Korea.

A North Korean People's Army officer opened it and seemed astonished at the wads of large-denomination bills. He then suspiciously examined the money, wondering if it might be counterfeit, according to a U.S. official.This was how the U.S. Army and U.N. Command in South Korea settled accounts with North Korea for delivering the remains of 46 American and other U.N. servicemen lost since the 1950-53 Korean War.

A U.S. Defense Department official told The Associated Press this week that the North Koreans provided them with an itemized bill for expenses and the U.S. wanted to make a gesture of trust by paying the bill.

The U.S. Army made clear to the North Korean Army that they did not regard the first payment - an average of $19,500 per set of remains - as the set price for future exchanges, said the official, speaking on condition of anonymity.

Although $897,000 was paid last year for bones turned over in 1990, 1991 and 1992, the compensation for thousands more sets of remains is far from settled. Hard bargaining continues over compensation for 148 sets of remains returned last year and 14 turned over on Tuesday.

The U.S. Army and U.N. Command want to limit compensation to $2,000 or $3,000 per set of remains, especially since only one set of remains has been positively identified and some of the remains included animal bones.

Forensic tests on the first sets of bones determined most of them did belong to U.N. soldiers or foreigners.

North Korea, seeking cash for its hobbled economy, wants $30,000 each.

The families of the soldiers and airmen received life insurance payments of just $10,000 after the men were declared dead in 1954 by the U.S. government.

U.S. Army Col. Mark R. Shoemaker, the U.N. Command secretary of the Korean Military Armistice Commission, confirmed Tuesday that the North Koreans are compensated for recovering U.N. servicemen's remains. He did not disclose how much Pyongyang has received.

North Korean officials insist they do not sell bodies, but turn them over as a humanitarian gesture. And the United States and U.N. Command say they do not buy bodies, but help pay for recovery expenses.

Norman E. Jones, a Korean War veteran who was part of the negotiations that led to the initial 1990 transfer, said: "Let's be truthful, it's money for remains."

While acknowledging the money transactions may be necessary to move the process along, he is indignant that North Korea could end up getting more than the families of the veterans.

"I think if it's only two or three thousand dollars, that's logical," he said. "If it's a huge amount, it would bother me."

The president of the Korean War Veterans Association, Nick Pappas, said Wednesday that his group had no official policy on payment for the return of remains.

About 8,100 U.S. servicemen are listed by the U.S. government as unaccounted for from the Korean War, including 866 bodies returned in 1954 but never identified. They were buried in Hawaii.

The U.N. Command says that 2,233 U.N. prisoners of war never came back, dead or alive. Among the missing U.N. servicemen are Americans, Britons, Turks, Filipinos and Colombians.

While the U.N. Command is doing the negotiating, it's the United States that is paying for the return of remains, American and others, the Defense Department source said.

Either way, it amounts to millions of dollars for the faltering North Korean economy.