What the Security Council can do about the crisis on the Korean Peninsula is another question. Two of North Korea’s best friends, China and Russia, are members of the Permanent Five. Washington has repeatedly sought their help in sending messages to Pyongyang, but so far nothing appears to have worked. Instead the North keeps raising the stakes. Besides pulling out of the NPT last week, Pyongyang also threatened to resume testing ballistic missiles for the first time since 1998. Bush officials could only do their best to stay calm. With or without nuclear weapons, no one wants to risk a war on the peninsula. Pyongyang could not win, of course, but its chemical and biological arsenals, along with its massive conventional military forces, all but guarantee that Seoul would be destroyed, along with everything else in the northern half of the peninsula.

That obviously gives South Korea a major stake in the outcome of this crisis. But rather than leaping to berate the North for its aggressiveness, Seoul has strenuously sought to position itself as an intermediary between Pyongyang and Washington. South Korean envoys went to Washington last week to urge the Bush administration to sit down and talk to the North. They may have been heeded: the administration OK’d unofficial discussions between North Korean envoys and former U.N. ambassador Bill Richardson, now governor of New Mexico, in Santa Fe. “I believe that the North Koreans now understand the depth of international concern over the issue,” he said afterward, voicing hope that the standoff will be resolved peacefully. A cabinet-level meeting between South and North is scheduled for later this month.

Why the conciliatory attitude? South Koreans cherish the dream of uniting the peninsula as a single nation–at some point in the distant future, after reforms have raised the North safely above its catastrophic level of ignorance and starvation. What the reclusive rulers of Pyongyang really want is anyone’s guess, as always, but it probably boils down to one thing: a comfortable, secure future for themselves and their immediate families. But what’s important is that they seem to have convinced their Korean compatriots to the south that at some level their interests are aligned, that ethnic ties should trump geopolitical considerations.

This is a game Pyongyang has been playing for years with a deftness that is seldom credited to North Korea’s supreme leader, Kim Jong Il. The idea is to pit the South Korean people against the United States by any means at hand–tiny but emotionally charged concessions to southern families, crocodile tears over purported U.S. military “atrocities,” or expressions of Korean brotherhood. The resulting rift between Seoul and Washington is now undermining unified action in the ongoing nuclear crisis.

It’s tempting to dismiss Pyongyang’s antics. Surely no one in the South believes the assertion from North Korea’s state-run news agency that the United States is an “empire of killers” plotting to “reduce Korea to a sea of blood”? Not literally, to be sure. Yet many southerners were no less turned off by Bush’s claim that North Korea, Iran and Iraq constitute an “Axis of Evil” bent on perpetuating global terrorism. The November court-martial acquittal of two GIs who killed two schoolgirls with their armored vehicle while on maneuvers only strengthened the sentiment. “The North Koreans are exploiting a degree of resentment that already exists here,” says an American diplomat in Seoul. “When I meet [South Koreans], they use words like ‘unequal,’ ‘unfair’ and ‘U.S. arrogance.’ I don’t think they give much thought to the fact that 37,000 Americans died in the Korean War.”

To sympathetic southerners, the North portrays itself as a poor but proud relative–not the well-armed, ideologically strident enemy it remains. Pyongyang has downplayed its secret nuclear-weapons program, cast the United States as the bad guy on the peninsula and wooed the young, progressive southerners who voted for President-elect Roh Moo Hyun, a former labor lawyer and reputed anti-American. “Pyongyang’s strategy is to transform the old confrontation between North Korea and the U.S.-led alliance into a new confrontation between the Korean people and the United States,” says Lee Hang Koo, director of the Unification Research Institute.

Anti-Americanism began more than 20 years ago in South Korea. Throughout the 1980s, students and workers repeatedly staged violent protests against the U.S.-supported dictatorship in Seoul–and the South’s riot police and soldiers fought back ruthlessly. Many of the young protesters fell for the North’s claims that Washington and Moscow, not Pyongyang, were responsible for the Korean War. Then, five years ago, the cash-hungry North abandoned its characterization of South Korea as an “illegal regime of American-sponsored reactionaries.” In Seoul, President Kim Dae Jung responded with a sweeping peace plan called the “Sunshine Policy,” promising massive financial assistance in exchange for broader contacts and less confrontation. In 2000, the two Kims held a historic summit in Pyongyang; a few months later South Korea’s president won the Nobel Peace Prize for his willingness to engage the communist North.

Yet his Sunshine initiatives did little to pry open the Hermit Kingdom. Rather, Pyongyang used the opportunity to hone its pitch as the misunderstood neighbor. Playing summit host, Kim Jong Il toasted his visitors like a quirky uncle. He promised great improvements in North-South contacts, joked about his reputation as a “hermit” and otherwise appeared as a worthy counterpart for engagement. His pledges to unite war-torn families, open road and rail links across the DMZ and establish special economic zones never fully materialized, –though, suggesting that he remained unwilling to open his regime to potentially destabilizing change.

From then on even Pyongyang’s fire-breathing rhetoric furthered its agenda. In late 2000 the regime denounced South Korea’s annual defense white paper, and demanded that Seoul desist from “hostile” rhetoric. The document, a dry, fact-filled tally of troop deployments, weapons systems and presumed invasion strategies, described the North as the South’s “principal enemy”–a label Pyongyang called an “intolerable insult.” In a sop to northern sensitivities, Seoul stopped issuing the yearly white paper and dropped the disputed phrase from all public documents.

Throughout Seoul’s halls of government, word went out that rhetoric critical of Pyongyang was unwelcome. Officials began to self-censor their statements on topics ranging from the North’s famine to its backsliding on bilateral agreements and deployment of chemical and biological weapons. A senior physicist in the South Korean military told NEWSWEEK: “In the Sunshine environment we never talked about the fact that North Korea’s programs to develop weapons of mass destruction were ongoing. Most specialists knew, but we couldn’t say anything about it.”

All the while it was open season on Seoul’s strongest ally, Washington. Bush in particular has become an easy villain to many younger South Koreans. He’s “a typical Texan cowboy who openly expresses the violent nature of the United States,” writes U.S.-educated scholar Cho Young Hwan in his recent book, “Is Korea’s President Elected by the U.S.?” He continues: “Most South Koreans now feel more threatened by the U.S. than by North Korea.” Bush’s hard-line stance is widely blamed for the Sunshine Policy’s failure. That doesn’t wash, of course: the North Koreans now admit they began a secret uranium-enrichment program around the time they hosted the “breakthrough” inter-Korean summit–many months before Bush was elected.

Roh, a true believer in the Sunshine Policy, has criticized Bush’s tough line against the North. Now, in part because of pressure from the South, the Americans say they’re ready to talk with Pyongyang. The fear is that the regime may get the wrong message. In 1994 the Clinton administration warned North Korea that its Yongbyon reactor complex would be attacked unless it halted nuclear-weapons development there. That lingering threat, combined with the Iraqi distraction, could convince Kim Jong Il that his moment to perfect–even test–a nuclear weapon has arrived. “That’s what worries me most,” a South Korean military official tells NEWSWEEK. “Every nation in the world that has tried to develop a bomb has eventually succeeded. The same thing will happen in North Korea.” Even now, that outcome may be unavoidable. And South Korea will then truly have to decide who its real friends are.