A state-run North Korean newspaper on Saturday rejected a U.S. proposal to resolve the standoff over the communist state's nuclear programs through multilateral talks, reiterating Pyongyang's demand for direct dialogue with Washington. President Bush said Thursday that multilateral dialogue was the best way to deal with the communist nation's nuclear development, which he called "a regional issue." Without mentioning Bush's comments, Pyongyang's daily Minju Joson on Saturday attacked the same proposal mentioned earlier by Secretary of State Colin Powell.

Pyongyang Preparing Missile Test

In Washington, U.S. officials said Friday that North Korea could be preparing for another missile test, citing a warning to ships to stay out of a sector of the sea between North Korea and Japan from Saturday to Tuesday.

North Korea's notice to mariners outlines an "exclusion zone" off its coast that is almost identical to one announced before it tested an anti-ship cruise missile Feb. 24, said Lt. Cmdr. Jeff Davis, a U.S. Defense Department spokesman.

The test-firing last month, which came on the eve of South Korean President Roh Moo-hyun's inauguration, fits with the pattern of recent North Korean maneuvers aimed at ratcheting up tension and forcing the United States into direct talks, according to Seoul officials.

U.S. officials sought to minimize the significance of that missile test, saying it involved a small weapon and not one of North Korea's long-range ballistic missiles.

Tensions escalated last weekend when North Korean fighters intercepted a U.S. surveillance plane in international airspace off the North's east coast.

There was no hostile fire, but one of the fighter planes came within 50 feet of the American aircraft. And a North Korean pilot made the internationally recognized hand signals to follow him in an apparent attempt to take the U.S. crew hostage, according to a senior defense official quoted in the New York Times' online edition Friday night. The U.S. pilot ignored the signal and returned safely to base, it said.

The nuclear dispute flared in October, when U.S. officials said Pyongyang admitted having a covert nuclear program in violation of a 1994 deal. Washington and its allies suspended fuel shipments; the North retaliated by expelling U.N. monitors, withdrawing from the Nuclear Nonproliferation Treaty and restarting a nuclear reactor.

PHOTO CAPTION

U.S. M-2 Bradley armored fighting vehicles and soldiers participate in a military training exercise to prepare for possible North Korean surprise attacks in Paju, South Korea, near the demilitarized zone (DMZ) between the two Koreas Saturday, March 8, 2003. AP Photo/Ahn Young-j