A South Korean bank clerk works next to a show case of counterfeit U.S. dollar bills at a local bank in Seoul

A South Korean lawmaker has quoted intelligence officials as saying they have no evidence North Korea has recently counterfeited U.S. dollars. U.S. authorities say they are convinced Pyongyang remains actively engaged in counterfeiting and other illegal financial activities. The discrepancy reflects strongly divergent approaches between Seoul and Washington to dealing with North Korea.

South Korean lawmakers received a closed-door briefing from South Korean intelligence officials Thursday. Afterwards, legislator Im Jong-in said the South Korean intelligence agency had been unable to substantiate Washington's allegation that Pyongyang is currently counterfeiting U.S. currency.

Responding to a reporter's question, Im said intelligence officials have no evidence that North Korea has done any recent counterfeiting of U.S. dollars.

Im quoted the intelligence officials as saying South Korea was aware of North Korean counterfeiting at least until 1998 - but not since then. President Bush and other senior U.S. officials say Pyongyang is still actively engaged in counterfeiting.

The U.S. ambassador to South Korea, Alexander Vershbow, recently referred to North Korea as a "criminal regime."

U.S. Treasury Department officials last week visited several Asian cities, including Seoul, to show authorities evidence of alleged recent illegal activities by North Korea, including counterfeiting. Washington has placed sanctions on a number of North Korean companies as a result of these allegations.

Pyongyang denies the U.S. accusations, and says it will not return to six-party talks on its nuclear program unless Washington drops the sanctions.

Very little is known about what happens inside North Korea, one of the world's most secretive nations. Peter Beck, Northeast Asia Director for the International Crisis Group research organization, says he doubts whether Washington or Seoul is in a position to pinpoint when North Korean counterfeiting might have taken place.

"And so, with a lot of ambiguous intelligence, people see what they want to see. And for Washington, that is, they assume that the North is counterfeiting, and for Seoul, that's, well, no they're not," he said.

The South Korean government of President Roh Moo-hyun pursues a policy of engagement and cooperation with Pyongyang. It has limited its public position on this issue to expressions of concern about possible counterfeiting.

However, in a press conference last week, Mr. Roh had strong words for U.S. policymakers who are pursuing a hard-line policy toward Pyongyang.

Mr. Roh said the South Korean government does not agree with some in Washington who seem to be seeking a collapse of the North Korean regime. He warned that a confrontational attitude toward North Korea by the U.S. could lead to "friction and disagreement" with Seoul.