It was the first time the two Koreas sent the trains across the Cold War's last frontier since the railways were severed shortly after the outbreak of the Korean War in 1950.

The pair of trains, each carrying 100 South Koreans and 50 North Koreans, returned home after staying two hours for celebrations for the opening of rail links between the two Koreas.

The first test runs along two restored tracks on the west and east sides of the peninsula was a highly symbolic event for the two countries to ease their decades-long Cold War hostilities and work together toward reconciliation, cooperation and eventual reunification of the peninsula.

"It is not simply a trial run. It is a very important incident in national history as it means reconnecting the severed bloodline of the peninsula," Seoul's Unification Minister Lee Jae-joung said in a ceremony at Munsan station, the South's point of train departure for Kaesong.

"Today, the heart of the Korean peninsula started beating again. The railways will lead (the two Koreas) to prosperity, peace and integration," he said in a speech before boarding the North-bound train. "This will be a turning point for reducing military tensions and promoting mutual confidence and reconciliation of the two Koreas."

At the ceremony, Senior Cabinet Councilor Kwon Ho Ung, chief of the North's delegation to Cabinet-level talks with the South, said the two Koreas "should not move back or hesitate" in their efforts toward achieving a "higher level of peace and economic cooperation beyond the Korean peninsula."

With colorful fireworks exploding, hundreds of South Korean people waved "unification" flags featuring a united Korean peninsula in blue on a white background as the train left for Kaesong, live television footage showed.

The rail test run was one of the tangible inter-Korean rapprochement projects agreed upon following the historic summit in 2002.

South Korea has provided $195 million worth of materials to the North to help restore its railways, while spending $586 million for restoring its own tracks. The North has called for an additional $5.4 million worth of aid to construct border railway stations.

In a bid to ensure the test runs, Seoul earlier this week endorsed the spending of funds needed for providing 400,000 tons of rice worth $170 million and $80 million worth of raw materials to the impoverished neighbor.

In addition, Seoul is considering providing aid to help the communist North improve its system in hopes that the South would be linked to the Asian and European continents through the North's railways.

If fully linked, the cross-border railway will reconnect the two Koreas' capitals and proceed on to Sinuiju, a major industrial city on North Korea's border with China. It will link up to China, Mongolia and eventually Russia's trans-Siberian railway, through which South Korea could deliver products to Europe, the second-biggest market for Seoul.

"The reconnected railways will provide an opportunity to connect us with Russia and China by linking the inter-Korean railways with the trans-Chinese Railroad and the trans-Siberian Railway," Unification Minister Lee said.

But test runs do not mean the lines are about to open to normal traffic. The North has repeatedly delayed trial runs of the cross-border trains, though work was completed long before on laying tracks, largely due to the military's concern that it would expose sensitive and secret installations near the border.

Last week the North's military finally agreed to provide military guarantees for the safe passage of trains -- but only for Thursday's test runs. The two Koreas should have more military talks to have further train runs across the border.

"It took seven years to conduct test runs since the two Koreas agreed to reconnect the railroads," said Chang Dal-Joong, a political science professor at Seoul National University. "Actual opening of cross-border rail links would come only after the resolution of North Korea's nuclear weapons issue. The inter-Korean rail project has a long way to go."

earlier related report
Wachovia bank considers NKorea cash transfer
Washington (AFP) May 17 - The US-based Wachovia bank said Thursday it was considering a State Department request to oversee the transfer of frozen funds back to North Korea. The move, if approved, could resolve a long-running financial dispute over 25 million dollars in reportedly tainted funds frozen in an Asian bank that has blocked progress on North Korea's pledge to start shutting down its nuclear program.

"Because of our international expertise, we have been asked, on a non-profit basis, by the US State Department to help them process an interbank transfer of funds held at other banks, which are the subject of negotiations with North Korea," Christy Phillips-Brown, spokeswoman for Wachovia Corporation, said in a statement to AFP.

"We have agreed to consider this request and our discussions with various government officials are continuing," she said.

Wachovia is headquartered in the southeastern state of North Carolina.

The funds were frozen in a Macau bank, Banco Delta Asia (BDA), at US instigation in September 2005 on suspicion they were the proceeds of money-laundering and counterfeiting.

North Korea cited the BDA dispute as a reason to boycott the six-nation talks for more than a year, during which it tested an atomic bomb.

In an attempt to move the nuclear talks forward, Washington announced in March that the funds had been unfrozen. But foreign banks have since been unwilling to handle cash seen as tainted.

Wachovia did not say how any transfer would be handled.

"We take any request for assistance from our government seriously and endeavor to cooperate whenever possible," Phillips-Brown said.

The bank would not agree to any request "without appropriate approvals from our regulators," she said.

North Korea's foreign ministry this week promised to start shutting down atomic plants under UN supervision as soon as the funds are transferred under a February 2007 accord reached at the six-nation talks.

earlier related report
China won't confirm NKorea money transfer claim
Beijing (AFP) May 17 - China would not confirm on Thursday the claim by North Korea that it has resolved a financial problem that has delayed a six-nation deal to denuclearise the reclusive state. North Korea's foreign ministry has said it has begun transferring 25 million dollars from a frozen account in Macau, the main sticking point in implementing a February 13 disarmament deal.

But China, Pyongyang's closest ally and a key broker in achieving the nuclear settlement, offered no further information on the claim or whether it would soon lead to full implementation of the accord reached in Beijing.

"We have taken note of the comment by the foreign ministry of the DPRK," Chinese foreign ministry spokeswoman Jiang Yu said, referring to North Korea.

"We hope this issue can be settled properly at an early date with the concerns of various parties being considered so we can press ahead...toward fruitful and pragmatic success."

North Korean accounts totalling 25 million dollars were frozen in a Macau bank in September 2005, at US instigation, on suspicion of money laundering and counterfeiting.

However, after Washington effectively unblocked the assets, they have remained tied up, apparently because other financial institutions were unwilling to handle the supposedly tainted money.

Pyongyang has said it will not move on implementing the nuclear deal until it receives all the money.

The accord calls for North Korea to begin shutting down its Yongbyon reactor in exchange for 50,000 tons of heavy fuel oil and allowing international nuclear inspectors into the country.

It would later be required to declare and disable all of its nuclear programmes in return for another 950,000 tons of fuel oil or equivalent aid.

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