June 18, 1999 By ELIZABETH BECKER, New York Times

WASHINGTON -- American intelligence agencies have uncovered evidence that North Korea is making initial preparations to test the launch of a ballistic missile later this summer, Clinton administration officials said Thursday.

Intelligence agencies say aerial photographs show that North Korea is refurbishing its launch pad and that the country is most likely to test its longer-range ballistic missile, the Taepo Dong 2.

Intelligence agency officials said the range of the North Korean Taepo Dong 2 missile test would be significantly longer than last summer's test of the less sophisticated model, which traveled almost 4,000 miles, before it splashed into the ocean. These officials said that once deployed the Taepo Dong 2 would be able to hit Alaska or Hawaii.

The discovery comes as North Korea and South Korea have reached a standoff on the seas where they fought a 30-minute battle early Tuesday at their disputed maritime border. The conflict ended with the sinking of a North Korean ship and the possible deaths of more than 20 sailors. On Wednesday North Korea suspended all contacts with the South.

To better monitor the dispute, the Pentagon dispatched two warships and surveillance combat jets to the area from their bases in Japan. The reports Thursday were optimistic. "It's clear that the North Koreans have moved their ships back, and currently there is a clear separation between the boats of both sides," said a Pentagon spokesman.

Should North Korea test a ballistic missile in a month or more, as intelligence agencies now estimate, it would jeopardize the Clinton administration initiatives to improve relations and reduce tensions on the Korean peninsula.

"This underscores why the most dangerous place on earth is not downtown Pristina but the Korean border," a senior Clinton administration official said.

After North Korea launched a three-stage rocket over Japan last summer, the Clinton administration stepped up proposals to develop regional missile defense systems with Japan and South Korea. The increased range of that missile raised alarms in Congress as well as the administration. The 37,000 American troops based in South Korea and nearly 50,000 others serving in Japan appeared far more vulnerable to the improving North Korean missile system.

This winter Secretary of Defense William Cohen visited Japan to further discussions of a research project with the United States to develop their theater missile defense. At the same time, Japan delayed financing of several nuclear energy reactors for North Korea to show its displeasure over what the Japanese public considered a provocative launch.

Two weeks ago North Korea was reminded by former Secretary of Defense William Perry that Japan and the United States would not tolerate another missile launch. Perry visited Pyongyang to float a proposal that would promise a lifting of United States sanctions against North Korea in return for promises to stop testing missiles and selling missile technology.

Some Republicans and defense analysts, already skeptical of Perry's initiative, said Thursday's news could torpedo that effort.

"Right now, the testing of a missile by North Korea would have a very severe political impact, more even than a military one," said Richard Armitage, a defense analyst and former Reagan administration official. "It will increase the fervor for a theater missile defense system and dampen any enthusiasm for Perry's ideas."

While all officials expressed concern over any new test, several said these initial intelligence findings were not conclusive proof that the North Koreans would launch a missile this summer and should not cut off the continuing diplomatic efforts to lower tensions on the Korean peninsula.

"No one is minimizing the thought that the next launch would be very provocative and very dangerous," said Sen. John Kerry, D-Mass. "The missile piece is not a surprise at this point. You just have to make sure another test doesn't happen, and I think this is more reason to keep engaged with North Korea."