By Charles Scanlon BBC News, Seoul

South Koreans digest details of the deal

Prominent members of US President George W Bush's administration make no secret of their contempt for a previous nuclear deal signed by the Clinton administration with North Korea in 1994.

Now, after years of confrontation, they have signed up to something that looks suspiciously similar - a nuclear freeze in return for economic and diplomatic incentives.

The difference is that North Korea now claims to be a nuclear power, having used the period of hostility to test a nuclear device and build a small arsenal of weapons.

The US negotiator, Christopher Hill, says the new agreement is just a first step.

Strategic decision

The aim is still the full dismantlement of all North Korea's nuclear capabilities, although he concedes there is still a long way to go.

North Korea will see the deal as a victory, our correspondent says

But analysts say US policy looks increasingly like a containment exercise - an attempt to limit the damage and restrict the expansion of the North's existing capabilities.

"After years of mistakes the United States has decided to stop digging a hole for itself," says Peter Beck, North-East Asia Director of the International Crisis group.

"The administration has made a strategic decision to go after Iran and to go soft on North Korea," he said.

After first ruling out rewards for "bad behaviour", the US has now signed up to a deal that will see substantial incentives for a state Mr Bush once consigned to his Axis of Evil.

Staggered rewards

North Korea will receive 50,000 tonnes of fuel oil for shutting down its nuclear reactor at Yongbyon, which produces enough plutonium for one atom bomb each year.

Another 950,000 tonnes of oil has been promised once the reactor has been "disabled".

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The US will say that amounts to more than a simple freeze - but to the North Koreans it will mean less than full dismantlement.

There will also be discussions on the establishment of diplomatic relations and the de-listing of North Korea as a state that sponsors terrorism.

The idea is to stagger the rewards in line with concrete North Korean steps towards nuclear disarmament.

That, however, was also the rationale behind the Agreed Framework of 1994, which fell apart after less than a decade.

"We've lost four or five years and now we have to start again with North Korea - except the situation is worse because they've now tested a nuclear device," says Jun Bong-geun of the Institute of Foreign Affairs and National Security in Seoul.

in Seoul, there is relief that the US has gradually moderated its position.

Washington has dropped its long objection to direct talks with the North Koreans and agreed to moderate the financial squeeze it imposed in September 2005 - a response it said at the time to the "criminal activities" of the North Korean regime.

'Victory'

One of the architects of the more punitive approach, however, the former US Ambassador to the United Nations, John Bolton, does not like what he sees.

"I'm very disturbed by this deal, it sends exactly the wrong signal to would-be proliferators around the world: If you hold out long enough, wear down the State Department negotiators, eventually you get rewarded," he told CNN.

The first test will come in 60 days when the North Koreans are required to shut down the nuclear reactor at Yongbyon.

If past experience is any guide, each step will be hotly contested and further breakdowns in the process are likely.

The US is insisting on a full accounting of North Korea's nuclear inventory, including an alleged parallel nuclear programme based on the enrichment of uranium.

North Korea denies it exists.

North Korea will probably see the latest round in its decades-long confrontation with the US as a victory.

Its goal is probably the extraction of economic aid and the maintenance of a nuclear arsenal as a final deterrent - an objective that appears more realistic now than it did when the latest confrontation began.