As the Bush administration prepares to revive the next round of six-party talks, it must decide what it ultimately wants it to achieve and in what shape its national interests can best be served while trying to find a mutually acceptable formula in the North Korean question. This will be an onerous task for an administration. Despite tough public pronouncements ranging from axis of evil to outpost of tyranny it continues to be badly divided between hard-liners who have pushed to isolate the North and other administration officials who favor active engagement.

Hard-liners in Washington viewed talks as an unwanted but unavoidable step in a policy ultimately intended to isolate North Korea and ultimately cause the collapse of Kim Jong Il's regime. This hard line policy calls for negotiation to fail, to be a staggered one and by setting a disproportionately high benchmark for success. So that North Korea unilaterally dismantles its nuclear program completely before the United States will even consider talks about its security, a non-aggression pact or economic support of any sort.

On the other side of the spectrum is the pro-engagement camp in Washington. This group believes that active engagement - backed by both conventional and nuclear deterrence - is the only realistic option to diffuse the situation in North Korea. This includes addressing North Korea's security concerns in a meaningful manner.

This position is based on two considerations. First, a policy of isolation will put a heavy toll on Washington's bilateral relations with Beijing, Moscow, Seoul and Tokyo. All these states have stated at one time or another that they want to avoid a real showdown with North Korea and instead work things out through constructive diplomacy. Second, Kim Jong Il, the North Korean leader, is unlikely to capitulate easily and may be a risk taker a la Nikita Khruschev in the now famous Cuban missile crisis of the 1960s. The probable costs of a military confrontation are awesome - politically and economically. In 1994, the United States military commander in South Korea estimated that a war with the North would result in one million deaths (including tens of thousands of Americans) and cost the United States at least $100 billion.

As a way out to end the impasse, there have been suggestions to offer North Korea a grand bargain, which it might find hard to refuse. This bargaining chip may be offered jointly by Seoul, Tokyo, and Washington for deescalating the simmering tension in Northeast Asia and also by evolving a plausible road map in a time bound fashion.

As per this bargain, first, North Korea would verifiably end all of its nuclear programs, allow on-site inspections of its uranium enrichment facilities as well as inspections of suspicious sites, and reseal the unprocessed plutonium it possesses.

Second, North Koreas will firmly pledge to allow its spent fuel rods to be taken out of the country, and to eliminate whatever nuclear weapons it is believed to have.

Third, North Korea would stop selling missiles abroad and ban all flight testing of longer-range missiles

Fourth, North Korea would allow all Japanese kidnapping victims and their families to leave North Korea. This is basically a continuation of the process that is underway in the aftermath of Japanese Prime Minister Junichiro Koizumi's visit to Pyongyang in 2003 and 2004.

And, fifth, make substantial cuts in conventional forces, as well as reductions in its forward-deployed military capabilities near the demilitarized zone (DMZ) with South Korea.

As part of the bargain, South Korea, Japan, and the United States, as well as other interested parties such as China, would keep basic food items, medicines as well as fuel oil being supplied to North Korea on humanitarian grounds and as a show of good faith. If North Korea accepts the above bargaining package, the allies would also begin to provide large amounts of economic aid to North Korea.

Furthermore, confidence building measures between the two Koreas that are currently underway could be pursued with renewed vigor. These include Pyongyang's efforts to revamp its economy with South Korea by developing the Kaesong (a North Korean city bordering South Korea) Industrial Zone, the start of overland travel across the DMZ, and partial re-connection of cross-border railways. Enactment of inter-Korea agreements such as investment guarantees, double-taxation avoidance, procedure for settling business disputes, and the settlement of accounts could also be pursued in right earnest. As the stakes are real high in North Korea with its possible ramifications spilling over to Northeast Asia, these suggestions could be given a serious try.