Periscope

U.S. officials say the Chinese government is deeply split over the issue, annoyed by the North Koreans but also fearful that the regime will collapse on its doorstep. The Russians, for their part, are suffering "bureaucratic inertia," according to the administration. In the meantime, the North Koreans are exploiting the crisis in Iraq to place added pressure on Washington. U.S. officials are waiting for the North to stage its next aggressive step in an attempt to shock Washington into agreeing to a big new aid package. "I anticipate a missile test probably five to eight days after we launch military strikes against Iraq," says one administration official.

Where North Korea is moving its fuel rods, nobody really knows. What U.S. officials do know is that the fuel rods--which were kept under seal since 1994--can be rapidly reprocessed into weapons-grade plutonium. North Korea, which already sells missiles to anyone who can pay hard cash, could soon go into full-scale production of nuclear weapons. That prospect--which once filled conservatives with horror--is now met with a giant question mark. "If a country is hellbent on developing nuclear weapons," says one official, "what can you do?"

--Richard Wolffe

AIDS

A Reason To Hope

When President George W. Bush unveiled a $15 billion AIDS relief package last week in his State of the Union, he showed a new enthusiasm for solving the epidemic--and a willingness to buck two of his key constituencies: the pharmaceutical industry and the religious right. Big Pharma has long resisted the idea of letting poor nations use generic AIDS drugs, contending that generics undermine their patents. But the new Bush plan relies on the lower-cost generics to make widespread treatment affordable. "The drug companies recognize AIDS drugs in Africa are a unique situation," says one senior administration official.