U.S. Deputy Secretary of State John Negroponte informed South Korea of Bush’s policy during his visit to Seoul earlier this month, the Kyunghyang Shinmun reported, citing a diplomatic source.

"Negroponte met South Korean officials at the U.S. Embassy in Seoul and elaborated on the U.S. government's position on the peace regime issue," the source was quoted as saying. "It is President Bush's determination to complete negotiations on setting up a peace regime in the first half of next year."

What is a "peace regime?"

It "involves a whole range of state-to-state and people-to-people relationships, all designed to promote security and cooperation on the Korean Peninsula," according to James E. Goodby of the Center for Strategic and International Studies in Washington, D.C. "And yet a peace regime is not the same as full reconciliation and peaceful reunification of the two Koreas," he continued.

U.S. Deputy Secretary of State John Negroponte speaks during a news conference in Seoul on March 6. Reuters/Jo Yong-Hak

Negroponte is in charge of the U.S. policy over the peace settlement on the Korean peninsula, while Secretary of State Condoleezza Rice has focused on the North's nuclear issue.

Negroponte also delivered Bush's plan on the Korean peace settlement to Japan and China during his visits ahead of his South Korean trip. "Negroponte has showed his strong interest in the establishment of a peace regime on the Korean peninsula," the source said.

The U.S. move marks another significant policy change by the Bush administration in dealing with North Korea following Pyongyang's nuclear test last October.

North Korea has long called for a non-aggression pact between Washington and Pyongyang and a peace treaty between them, insisting the United States was seeking a war of aggression against the communist country labeled by Bush as part of an "axis of evil."

Washington had flatly ignored the North's demand, seen as a strategy to end U.S. military presence in South Korea.

The groundbreaking accord is the result of the Bush administration's new policy toward the North, which has also caused a diplomatic dilemma for Japan and its tougher North Korea policy.

North Korea and the United States fought against each other in the 1950-1953 Korean War, which is technically not over. The armistice signed at the end of the conflict has yet to be replaced by a peace treaty.

The United States maintains a military presence in the South as a deterrent against the North's 1.2-million-strong armed forces, the world's fifth largest. The Demilitarized Zone is the world's last Cold War flashpoint with nearly 2 million troops massed on both sides.