View Across the DMZ on Korean Peninsula:

On a brilliant sunny day, at an observation post atop a wooded hill called Dorasan, 40 miles north of Seoul, vehicles were seen moving along a two-lane highway across the Demilitarized Zone into North Korea.

The procession of cars and trucks, permitted to go up the road every hour during in day time, was carrying South Korean technicians and managers to factories in the Kaesong economic complex, whose gleaming new factories in clear weather are easily visible from Dorasan. “The transportation corridor is open,” said South Korean Sergeant Kwon Seok-ho, making certain that visitors did not step over a line beyond which photography of the sweeping view is banned.

A retired American army officer, Stephen M. Tharp, leading foreign visitors on a special tour sponsored by the U.S. military command in Seoul, was relaxed. “We’re not going to do tours if it’s too dangerous,” said Tharp, who has spent most of his career both in the army and in civilian life observing and advising on North Korean issues. As for what to expect in coming days and weeks, “You don’t get a breakthrough until you raise tensions real high.”

In the confrontation between North and South Korea, the standoff focuses on economic as well as military fronts. North Korea vowed to open fire against any South Korean vessel intruding in its waters in the West or Yellow Sea. One issue there is how to define which waters are North Korean. The North does not recognize the Northern Limit Line, set by the United Nations Command after the Korean War and challenged by North Korea in bloody gun battles in June 1999 and June 2002. A North Korean boat was sunk in the former, killing at least 40 sailors on board. Six sailors died on a South Korean patrol boat in the second battle.

The standoff is most acute in June. That’s the height of the crabbing season in the fish-rich seas and the month when the North is most likely to threaten South Korea’s defense of the Northern Limit Line and five small islands wrested from North Korean troops in the Korean War. The announcement by the North Korean command that it’s abrogating a safeguard agreement reached between North and South in 2004 to stop “accidental” exchanges of shots added to the rhetoric. The agreement was more or less meaningless anyway in the aftermath of the attack in which a torpedo sank the South Korean corvette Cheonan on March 26, killing 46 of its 104 crew members.

If the Yellow Sea is a potential flashpoint, however, almost anywhere along the 155-mile-long Demilitarized Zone that’s divided the Korean peninsula since the end of the Korean War could become a battleground. Neither side, however, is really eager to fight. South Korea cancelled plans for lofting balloons over the North bearing propaganda leaflets or switching on mega-loudspeakers capable of spewing forth music, news and views for tens of thousands of North Korean soldiers within shooting distance after North Korea said it would respond to verbal gunfire with live fire targeting the loudspeakers. The North Koreans presumably know where they are since they used to shout out propaganda until both sides agreed to stop the yakking six years ago. That was at the height of the decade of the Sunshine policy of North-South reconciliation initiated by the late president, Kim Dae-jung, in1998.

In the wake of the Cheonan episode, South Korea’s conservative president, Lee Myung-bak, decided on economic rather than military retaliation. On May 24, he suspended North-South trade, cut off most humanitarian aid, and barred South Koreans from visiting the North. Those were substantive steps. Inter-Korean trade had risen to $1.5 billion a year with North Korea enjoying a favorable balance of more than $200 million, much of it in seafood, finished clothing and minerals such as zinc. At the same time, Lee opened a global diplomatic offensive in which he’s trying to get the rest of the world, notably China, to go along with condemnation of North Korea and strengthened sanctions. China, however, prefers stability and calm to any move that might carry the risks of more fighting. Just as Korean society is basking at all-time economic heights, no one wants the peninsula to plunge again into chaos with thousands of lives at stake.

If it’s difficult actually to imagine that scenario, North Korea has another card to play. The North at the end of May expelled a handful of South Korean officials from the Kaesong complex and has the power to cut off access for nearly 1,000 technicians and engineers who run upwards of 100 factories owned by South Korean medium and small enterprises in the zone. More than 40,000 North Koreans toil at the assembly lines in a deal in which the South Koreans are paying the North Koreans upwards of $50 million a year in salaries that the workers never see.

The fear is that North Korea, in a showdown, would hold the South Koreans inside the zone, keeping them as hostages until the South agreed to innumerable demands beginning with revision of the Northern Limit Line. That fear was enough to raise doubts about the wisdom of annoying North Korea’s leaders with unbridled propaganda assaults. Such concerns extend to the sacrosanct Joint Security Area in the truce village of Panmunjom that’s next to Kaesong. About 600 troops are responsible for rotating on guard duty at Kaesong in a largely ceremonial role. Among them are 40 Americans, the last of a much larger U.S. force that used to patrol all along the southern side of the Demilitarized Zone.

The sense has long been that the Americans are no longer needed. The South Koreans say they, not their American ally, would bear the brunt of a North Korean attack. The U.S. still has 28,500 troops in Korea, but the vanguard, one brigade of infantry and supporting units, are all that remain on the northern approaches to Seoul. The most formidable U.S. unit in South Korea undoubtedly is the Seventh Air Force, at Osan Air Base well south of the capital. Most of the other American forces, including the historic U.S. military heaedquarters in Seoul, are due to move to an expanding new base at the nearby west coast city of Pyongtaek.

A Korean-American tourist who has lived in New Jersey for 30 years recalled the tensions he experienced more than 30 years ago as a Korean army officer leading a platoon south of the Demilitarized Zone in mountains on the eastern side of the peninsula. “Everything will calm down in a few months,” said the businessman, with me on a typical tour to Panmunjom, where the truce ending the Korean War was signed in July 1953. “The first few weeks are the most dangerous, he said. “Then things slow down.” He worried enough, however, to have asked the travel agency that put him on the tour if it was safe. The agency assured him it was – unless South Korea resumed the loudspeaker barrage. “We expected them to invade in 1975 after the victory of the Communists in Vietnam,” he said. “Probably the soldiers on the DMZtoday have the same feelings as we did then.”

Over the years Panmunjom, like Dorasan and a nearby North Korean infiltration tunnel, discovered in 1978, has become a standard tourist stop. Hundreds of tourists go there every day from Seoul, and tourists also come down from the northern side. They all have to remain on either side of a line that cuts through the middle of the Joint Security Area. A highlight of trips from the southern side is entry into a small one-room building astride the North-South line. At the end of one briefing for tourists, a South Korean lieutenant surprised us with an unusual reminder after tour guides had been telling us to behave properly and not make any offensive gestures that North Korean soldiers on the other side might see. “Tension is high,” said Lieutenant Han, not revealing his last name, as he faced an audience of mostly Japanese and Chinese tourists. “Please do as told.”

The visitors dutifully entered the single blue-roofed one-room structure on the line, walking around a burnished desk across which officers from both sides occasionally confront each other. They posed for photographs and then were whisked back the way they came on the promise of more sights to see in the enclave where the armistice was signed. No sooner had we returned to our bus in front of Freedom House, the imposing stone and concrete edifice that was completed in 1998 in hopes of staging reunions there between families separated by the Korean War, than we got another surprise. The tour bus would not swing by “the bridge of no return” across which prisoners had walked across the North-South line after their release under terms of the armistice. The view of the bridge, a standard stop on visits to Panmunjom, it seemed would expose us to the highly minimal chance of capture by the North Koreans.

It’s safe to assume South Korea would bar tours to Panmunjom if the risks actually seemed serious. For North Korea, though, the chance to seize tourists as hostages would conceivably be tempting in some un imaginable showdown. “We just got word,” a young soldier, Private Shin Dong-hee, told me. “It is too dangerous.” An eerie silence hung over the truce village with tour leaders warning tourists on where and when to take photographs, reminding them that South Korean officers would confiscate cameras and notebooks if they broke the rules. “Most ordinary people do not feel so tense,” said Paek Soo-jin, a tour guide, “but I’m scared.” Previously, “We gave ev-erything to North Korea and want to talk,” she said. South Korea was “very soft.” Now, however, the mood had changed.

By scrapping agreements with the South, North Korea set off alarm bells in the minds of South Koreans. The North Korean command did not mention the truce village but said it might stop South Koreans from entering the Kaesong complex, on a former North Korean military base within a mile or so of central Kaesong, an historic former capital of all Korea before the rise of the Yi dynasty. And by threatening “physical strikes” against South Korean ships entering North Korean waters, North Korea warned that clashes could break out any time around where the Cheonan went down.

Soon, however, South Korea tempered its own tough talk with signs of a desire to cool down tensions before they boiled over into fresh outbreaks of violence with unpredictable consequences. After the defense ministry said it was putting off the campaign of balloons and loudspeaker broadcasts, the South’s unification ministry began modulat-ing its responses to the sinking of the Cheonan.

The fact is that neither North nor South Korea wants to shut down the complex at Kaesong, the last point of normal contact between the two Koreas. Choi Boh Seon, director-general for inter-Korean cooperation at the unification ministry, was reassured by reports from Pyongyang. North Korea needs “inter-Korean economic cooperation,” he said, “and will make an effort to build up the complex.” Choi offered reason for hope: South Korean factory managers at the complex had told him the North Koreans were working harder. “They are more committed to their work,” he said. “That’s because they want to maintain this industrial complex.”