By Christine Kim and Matt Spetalnick
SEOUL/WASHINGTON (Reuters) - The United States has appeared to endorse deeper post-Olympics engagement between South and North Korea that could lead to direct U.S. talks, but has agreed with Seoul that sanctions must be intensified to push Pyongyang to give up its nuclear weapons.
With South Korea considering a rare summit with the North, Vice President Mike Pence said in a newspaper interview that Washington and Seoul had agreed, in discussions on the sidelines of the Winter Olympics in Pyeongchang, on the basic terms to guide future diplomatic contacts with North Korea.
The prospect of negotiations comes after months of tension between Pyongyang, Seoul and Washington over North Korea's nuclear and missile programs, with U.S. President Donald Trump and North Korean leader Kim Jong Un trading insults and threats of destruction amid tightening sanctions from the United Nations.
Speaking to the Washington Post on his way home from the Games, Pence said Washington would step up its "maximum pressure campaign" against Pyongyang but at the same time would be open to talks without pre-conditions.
“The point is, no pressure comes off until they are actually doing something that the alliance believes represents a meaningful step toward denuclearization,” Pence was quoted on Sunday as saying. “So the maximum pressure campaign is going to continue and intensify. But if you want to talk, we’ll talk.”
Pence's overture, which raised again the possibility of direct talks floated previously by some Trump aides, also appeared aimed at regaining the initiative for the Trump administration after the vice president was widely seen as having been outmaneuvered in an Olympics public relations battle with Kim's sister, Kim Yo Jong.
She charmed her South Korean hosts despite skepticism about the North Korean leader's sincerity, fueling concerns among some analysts in both Washington and Seoul that the North-South thaw could drive a wedge between the two allies.
Washington was caught off guard by the effectiveness of the North Korean propaganda campaign, U.S. officials said. “Kim ran an end run on us, and he had some success, at least in the opinion section,” one senior official said, speaking on condition of anonymity.
But given conflicting signals in the past from Trump and his aides over diplomacy with North Korea, it remained unclear whether Pence's remarks would mean a shift in U.S. strategy.
At the same time, North Korea recently has shown no interest in talking to the United States and has made clear it has no intention of negotiating away its nuclear and missile programs.
'IT'S REALLY UP TO NORTH KOREA'
U.S. Secretary of State Rex Tillerson said on Monday it was too early to judge whether the latest developments represented the start of a diplomatic process.
In December, Tillerson offered to open talks with North Korea without pre-conditions, but the State Department later said there would first have to be a "period of calm" in which Pyongyang suspends nuclear and missile testing.
"We've said for some time it's really up to the North Koreans to decide when they're ready to engage with us in a sincere way, a meaningful way," Tillerson told reporters in Egypt. "They know what has to be on the table for conversations."
Trump, in office since January 2017, has at times questioned the purpose of further talks with the North after years of negotiations by previous U.S. administrations failed to halt the North's weapons programs.
Last year, North Korea conducted dozens of missile launches and its sixth and largest nuclear test in defiance of U.N. resolutions as it pursues its goal of developing a nuclear-armed missile capable of reaching the United States.
Tensions between the two Koreas have eased in recent weeks, with Pyongyang sending its highest-ranking delegation ever to attend the Games, including Kim Jong Un's younger sister.
The visit included an invitation for South Korean President Moon Jae-in, who has been pushing for a diplomatic solution to the North Korean standoff, to travel to Pyongyang for talks. Such a meeting, if it came about, would mark the first inter-Korea summit since 2007.
A South Korean official said Seoul's stance was that separate talks with North Korea by South Korea and the United States should both lead to the denuclearization of the North while sanctions and other pressures continue to be applied.
North Korea defends its weapons programs as essential to counter U.S. aggression, saying military drills between the United States and the South are preparations for invasion. The South hosts 28,500 U.S. troops, a legacy of the 1950-53 Korean war.
During Pence’s visit, Moon assured the vice president he would tell the North Koreans they would not get concessions for just talking, only for taking steps toward denuclearization, the Washington Post reported.
Moon also told Pence that harsh U.S. rhetoric, including threats of military action, was not helpful to South Korea's fragile diplomacy with the North, the senior administration official told Reuters.
Pence agreed the Trump administration would allow the two sides room to talk, the official said, adding, however, that Washington was concerned the North would drag out the process to buy time for its weapons development.
South Korea said on Monday it would seek ways to continue engaging North Korea, including trying to arrange more reunions for families divided by the war and lowering military tensions.
"(The visit by the North Korean delegation) shows that North Korea has a strong will to improve inter-Korean relations and that Pyongyang can make unprecedented and bold measures if deemed necessary," South Korea's Ministry of Unification said.
The delegation's visit intrigued many in South Korea, but also met skepticism, with some critics seeing the North's participation in the Games as a reward for bad behavior.
Kim Yo Jong and her delegation spent three days dining with top officials, watching the opening ceremony and cheering for the united women's ice hockey team.
International Olympic Committee president Thomas Bach will visit North Korea after the Games as part of an agreement between the IOC and North and South Korea, a source within the Olympic movement told Reuters on Monday.
(Reporting by Christine Kim in SEOUL, Matt Spetalnick, David Brunnstrom and John Walcott in WASHINGTON and Yara Bayoumy in CAIRO; Editing by Lincoln Feast, Nick Macfie and Frances Kerry)