North Korea has rejected a plan for reunification with its southern neighbor put forward by South Korean President Lee Myung-bak.

A statement quoted by Pyongyang's official Korean Central News Agency dismissed the proposal as a formula for all-out confrontation designed to bring down the North Korean political system.

KCNA said the statement was issued Tuesday by the North's Committee for Peaceful Reunification. It said Mr. Lee's call for North Korea to give up its nuclear arsenal as a condition for reunification was nothing more than a scheme to get the North to disarm itself.

Mr. Lee made the proposal Sunday during a speech to mark the 65th anniversary of the peninsula's liberation from Japanese colonial rule.

In the speech, the South Korean president outlined a three-stage plan including a "unification tax" to offset the financial burden that would be created by integrating the destitute North with the South's vibrant economy.

He said that peaceful coexistence would lead to economic cooperation and then to a community of one people.

Relations between the two Koreas have been strained since Mr. Lee came to power in February 2008 promising to take a tougher line with North Korea than his predecessor, Roh Moo-hyun.

Those strains intensified with the sinking in March of a South Korean warship, the Cheonan, and a series of South Korean military exercises, including one with the United States.

Some information for this report was provided by AP and AFP.