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South Korea's president offered North Korea a "grand bargain" Monday in which the North would receive much-needed economic assistance in return for giving up its nuclear program.

The proffered deal may be impoverished North Korea's "last chance" to give up its nuclear weapons in exchange for aid, President Lee Myung-bak said during a speech at the Council on Foreign Relations in New York, where he is attending the UN General Assembly this week.

The move comes as the Obama administration said that engaging the reclusive North Korean regime directly may be the best way to bring it back to denuclearization talks. But administration officials also said that China, the nation that wields the most influence over the North, must do more to bring North Korea back into multilateral negotiations.

Bloomberg reports that Mr. Lee said the terms of a "grand bargain" would be decided by the nations involved in the six-party talks. North Korean leader Kim Jong-il walked away from those negotiations, which involved the US, China, South Korea, Japan, and Russia, after the UN condemned his regime's launch of a missile in April. The North tested a nuclear device for the second time in May.

The move is a departure from the previous approach of offering rewards to the North for incremental progress, reports The Korea Herald. Seoul is refusing to "buy the same horse twice," according to the newspaper.

"Some may call this rhetoric, but to us, this signals that most of the international community, possibly even China, is willing to let the current sanctions on the North continue until the ultimate deal is reached," said one [Foreign Ministry] official declining to be identified….

Foreign Ministry officials stressed that the "grand bargain" strategy is significant because it shows that even if the six-party talks are revived, they would no longer allow Pyongyang to reap rewards every step of the way as it did under the previous incremental approach.

The newspaper also reported that critics contend the North will not make any concessions until it achieves coveted bilateral talks with the US.

The Christian Science Monitor reported Friday that Mr. Kim said he was open to bilateral and multilateral talks after a visit from a Chinese official. The Monitor reports that Seoul has expressed deep reservations about direct US-North Korea talks. South Korea wants the North to agree to denuclearization before any new agreement, and also fears being marginalized by direct talks. The US has assured South Korea that any direct talks would only be aimed at bringing the North back to the multilateral negotiations, according to the Monitor.

South Korea's foreign minister told US Secretary of State Hillary Rodham Clinton Monday that the South would not oppose talks if that was their only aim, the Associated Press reports. The AP also reports that US officials said they expect China to urge the North to return to six-party talks.

An editorial in The Korea Times argues that Lee likely felt prompted to propose the "grand bargain" by the US's move toward bilateral talks, and his speech was aimed at cautioning the US to deal carefully with the North.

Lee must have felt an urge to make clear that the U.S., South Korea and other allies should no longer play into the hands of North Korea because the Stalinist country has yet to show any sign of change in its quest for nuclear weapons…. Lee said, "We must not repeat our mistake of the past 20 years when we allowed the North Korean nuclear issue to return to its starting point by agreeing to a nuclear freeze and rewarding the North for such an agreement while ignoring the fundamental issue of complete nuclear dismantlement."

The mistake certainly refers to the acceptance of North Korea's "salami strategy" under which the reclusive country had only made "thin slices" of concessions for large incentives while keeping its nuclear program intact.