North flies the flag for Korea peace deal

RICHARD LLOYD PARRY

Panmunjom, South Korea

At Panmunjom, the Armistice Village, they still talk about the flag incident. It started in a dingy concrete conference room in the narrow demilitarised zone (DMZ) which has separated the armies of communism and capitalism since the Korean War. In the middle of the building, straddling the border itself, is a felt- covered conference table, and on it stand two miniature brass flag stands: the white-and-blue of the UN, and the red star of North Korea.

The trouble began with an alarming realisation by the communist side: the UN flag, previously the smaller of the two, had suddenly grown by several inches. The North Koreans responded: at the next meeting they produced a still taller stand, with a broader, longer flag. The American generals counter-attacked with an even bigger ensign. "This continued until the flags were so large that they couldn't be brought into the building," explains the US Army guide. "In the end, they set up a flag committee and reached an agreement on the size. The North Korean flag is slightly taller, but ours has a bigger top."

Welcome to Panmunjom, last flashpoint of the Cold War, and surely one of the most comically sinister places on earth. In the souvenir shop of the UN camp, coachloads of tourists buy DMZ baseball caps, key-rings, lapel badges; a few hundred yards away, beyond the margins of the DMZ, is the world's biggest concentration of combined troops, tanks, artillery, chemical and (just maybe) nuclear weapons. Panmunjom is a geo-political throwback, a Disneyland of the Cold War where Mickey Mouse drives a tank and Donald Duck carries an assault rifle. Now, 42 years after the signing of the 1953 armistice that brought it into being, its future looks increasingly murky.

For months, and with mounting vigour in the last week, the North Korean government has been hinting that it may unilaterally withdraw from the armistice. Technically, this would mean that the Korean War, on indefinite hold since 27 July 1953, would be on again. Few people realistically expect the tanks to start rolling across the border. But it would put increasing pressure on the tense diplomatic knot which binds together the peace.

The 1953 armistice was a military ceasefire signed by generals; despite sporadic efforts, no agreement has ever been concluded in its place, and the two Koreas remain in a hostile limbo.

For years, relations between the opposing sides - North Korea and the UN-backed American-South Korean alliance - got little further than arguments about flags, with intermittent deadly incidents, like the shooting down of a trespassing US helicopter in 1994, and the killing of a North Korean infiltrator near the DMZ last year. In any case, since 1994, when the North withdrew its mission to the Military Armistice Commission - the body that deals with the day to day running of the armistice - and expelled neutral observers,the armistice has been little more than a piece of paper.

But recently, Pyongyang officials have been pressing a new idea: a peace treaty, not with Seoul, but with Washington.

On the face of it, the suggestion is a compelling one. North Korea is at a uniquely vulnerable moment, with a failing economy, food shortages, and doubts about the authority of its "Dear Leader", Kim Jong Il. In practice, it is rendered unthinkable by the third line in the Korean triangle, the one linking the United States and South Korea.

More than anything, perhaps more than war itself, the South fears being marginalised in a Korean peace. The fear is that US-North Korean detente would reduce Washington's commitment to Seoul, that an end to the US trade embargo would boost the North's economy, and that the South would be left facing an invigorated enemy.

But despite Seoul's opposition, the day may yet come when the three sides meet again across a table, with more to talk about than the size of their flags.