The US has pledged to reopen negotiations with North Korea after a three-month freeze.
In stark contrast to the scepticism he adopted on North Korea when he took office, President Bush has announced new talks which will be broadened to include the issue of nuclear missiles.
Mr Bush promised that if North Korea responded positively, the US would expand aid and ease sanctions.
Mr Bush announced he had re-directed his national security team to undertake "serious discussions" with North Korea following his review of US policy towards the Stalinist state.
Topics will include North Korea's nuclear activities, including verifiable constraints on its missile programmes, a ban on missile exports and a less threatening conventional military posture.
"We will pursue these discussions in the context of a comprehensive approach to North Korea which will seek to encourage progress toward North-South reconciliation, peace on the Korean peninsula, a constructive relationship with the United States and greater stability in the region," Mr Bush said.
The decision was made during a meeting of Mr Bush's senior foreign policy advisers on Tuesday. The South Korean Foreign Minister, Mr Han Seung-soo, was officially informed of the decision at a meeting with the US Secretary of State, Mr Colin Powell, yesterday.
When they left office in January, aides of the former president, Mr Bill Clinton, claimed they were very near an agreement that would halt North Korea's production and export of missiles, which are considered a threat to US forces on the Korean peninsula, as well as South Korea and Japan.
Unlike the Clinton team, which favoured a "step-by-step approach" to North Korea, the Bush team plans to take a "comprehensive approach", according to an official.
Officials said the Bush administration would not seek the renegotiation of the 1994 accord that gives Pyongyang nuclear power reactors in exchange for a freeze on its nuclear arms programmes. But it will insist that North Korea begins to bring its nuclear programme under the safeguards of the International Atomic Energy Agency and produce evidence of the nature and scope of its now frozen nuclear weapons programme.
The Bush team will also seek to persuade North Korea to reduce its conventional forces, which include a massive array of troops and weapons along the demilitarised zone with South Korea.