Confronted with a nuclear challenge from North Korea and the possibility of war with Iraq, President Bush resolved on Tuesday to try to find peaceful solutions to both in 2003. His New Year's eve vow came even as the United States built up its military presence in the Gulf region and the communist regime in Pyongyang added a fresh twist to the Asian nuclear crisis by hinting it might pull out of a global non-proliferation treaty because of Washington's threats.

"We hope to resolve all the situations in which we find ourselves in a peaceful way," Bush told reporters at a coffee shop in the tiny town of Crawford near his family ranch. "And so that's my commitment, to try to do so peacefully."

But Bush drew distinctions between the two international threats. He expressed confidence that diplomacy could head off North Korea's nuclear ambitions while reminding Iraqi President Saddam Hussein that the growing U.S. military presence in the Gulf was designed to make sure he "heard the message."

Asked about the potential cost of a war against Iraq, Bush countered: "An attack from Saddam Hussein or a surrogate of Saddam Hussein would cripple our economy."

White House budget officials say they have not put a price tag on a possible war with Iraq and that the only baseline for budget planners was the 1991 Persian Gulf conflict, which cost more than DLRS. 60 billion.

U.S. officials have argued that Saddam could go after U.S. interests or supply weapons to extremist groups like al Qaeda, which the United States accuses of masterminding the Sept. 11, 2001 attacks on the World Trade Center and the Pentagon.

PHOTO CAPTION

President George W. Bush gestures as he chats with the press as he stops at the local Coffee Station December 31, 2002 in Crawford, Texas, near his 1,600-acre ranch. (Mike Theiler/Reuter