N. KOREA VOWS TO DENUCLEARIZE PENINSULA, REBUILD ECONOMY IN 09.

SEOUL, Jan. 1 Asia Pulse - North Korea said Thursday that it will rebuild its ailing economy and aim for denuclearization in the New Year, in an apparent signal of its willingness to start afresh with the United States.

In a joint newspaper editorial that summed up policy goals for 2009, Pyongyang continued criticism of Seoul but made no hostile mention of Washington, just three weeks before the inauguration of a new U.S. administration.

"The independent foreign policy of our Republic to denuclearize the Korean Peninsula and defend peace and security of Northeast Asia and the rest of the world is demonstrating its validity more fully as the days go by," the editorial jointly issued by the North's ruling party, army and youth military said.

Pyongyang sees the inauguration of U.S. President-elect Barack Obama on Jan. 20 as an opportunity to start afresh after eight years of largely sour relations with the outgoing Bush administration. Six-party talks aimed at denuclearizing North Korea are on hold until Obama takes office. The latest round ended without progress in December.

In an apparent gesture to the U.S., the editorial said North Korea "will develop relations with the countries friendly towards us."

Pyongyang will continue to uphold its military-first policy, but this year's statement showed an increased focus on the economy. It made no mention of Pyongyang's customary accusations of joint military exercises by South Korea and the U.S.

The North's ailing economy shrank 2.3 percent in 2007, following a 1.1 percent fall a year earlier, according to South Korea's central bank. The global economic downturn is expected to further drive down its export volume and aid from the outside