U.S. intelligence agencies have determined that the impoverished North Korea is the world's leading exporter of ballistic missiles. The assessment may have formed the basis for President George Bush's characterization of North Korea as part of the new "axis of evil" in his State of the Union address on Jan. 29.

U.S. officials said Pyongyang has been offering its most advanced missiles to such regimes as Iran, Iraq, Libya and Syria. The officials said North Korea has managed to complete some sales despite the Washington-led war on terrorism, Middle East Newsline reported.

"North Korea is now the world's number one merchant for ballistic missiles, open for business with anyone, no matter how malign the buyer's intentions," U.S. National Security Adviser Condoleezza Rice said on Jan. 31.

Ms. Rice said North Korea has rebuffed U.S. efforts to stop Pyongyang's missile sales. She said North Korea has not provided a serious response for an end to missiles sales as part of a reconciliation with Washington.

Last week, the CIA said in a report that throughout the first half of 2001 "North Korea continued to export significant ballistic missile related equipment, components, materials, and technical expertise to countries in the Middle East, South Asia, and North Africa."

The United States has "offered a roadmap for reciprocal steps that would enable North Korea to take a better course," Ms. Rice said in a speech in Washington on Thursday at the Conservative Political Action Conference. "We've had no serious response from Pyongyang," she said.

U.S. officials said North Korea's missile exports have not been affected by the U.S.-led war on terrorism. They said the Bush administration plans to increase monitoring of North Korea to help stop its missile sales to Middle East clients.

"I certainly hope that North Korea, for example, listens to what we suggested; and that is, they pull back some conventional weaponry to make a clear declaration of their peaceful intentions on the peninsula; and that they not export weapons," President Bush said on Feb. 1. "We would be more than happy to enter a dialogue with them if that would be the case."

In his State of the Union address, President Bush characterized the "axis of evil" as follows:

"North Korea, Iraq, Iran Ñ some of these regimes have been pretty quiet since September 11th. But we know their true nature. North Korea is a regime arming with missiles and weapons of mass destruction, while starving its citizens.

"Iran aggressively pursues these weapons and exports terror, while an unelected few repress the Iranian people's hope for freedom. Iraq continues to flaunt its hostility toward America and to support terror. The Iraqi regime has plotted to develop anthrax, and nerve gas, and nuclear weapons for over a decade. This is a regime that has already used poison gas to murder thousands of its own citizens Ñ leaving the bodies of mothers huddled over their dead children. This is a regime that agreed to international inspections Ñ then kicked out the inspectors. This is a regime that has something to hide from the civilized world.

"States like these, and their terrorist allies, constitute an axis of evil, arming to threaten the peace of the world. By seeking weapons of mass destruction, these regimes pose a grave and growing danger. They could provide these arms to terrorists, giving them the means to match their hatred. They could attack our allies or attempt to blackmail the United States. In any of these cases, the price of indifference would be catastrophic. "

Ms. Rice and other administration officials have cautioned that Mr. Bush's stark words did not necessarily mean that military action was imminent.

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