Meanwhile, a group of 311 South Korean religious, labor and civic leaders arrived in North Korea on Wednesday to take part in joint Liberation Day celebrations.
Kim, whose Liberation Day speech warned of deeper reform of a struggling economy and promised a fairer deal for the poor, urged the United States and North Korea to end a freeze on talks that has blocked progress on reunification.
But he cautioned once again against rushing headlong into reunification and stopped short of advocating or supporting any action against Japan, the Korean peninsula's colonial master before and during World War Two.
"Right now we are faced with a stalemate. Since the beginning of the year, North Korea and the United States have failed to hold a meeting and North-South talks have not been progressing," Kim told the nation.
August 15 is the anniversary of Korea's liberation from Japan's 1910-45 colonial rule.
Marking 56 years of independence, Kim said that South Korean pride on its national day was tinged with "pain in a corner of our heart" at the stubborn Cold War division of the Korean peninsula and the unfulfilled promises of his historic summit last year with North Korean leader Kim Jong-il.
A chartered Asiana Airlines plane carrying the Southern delegates and 26 journalists flew directly to the North's capital, Pyongyang.
The South Koreans planned to return after one week of seminars, cultural events and hikes to scenic points. Aug. 15 is the anniversary of Korea's liberation from Japan's 1910-45 colonial rule.
The Seoul government initially banned the trip, but allowed it after North Korean hosts eased conditions regarding the venue of the proposed celebrations.
North Koreans had insisted that the celebrations be held at a new monument in Pyongyang that South Korean officials believe would be used for political propaganda.
Washington and Pyongyang should resume talks frozen since late last year and North Korea must fulfill the pledge it made last year to attend a reciprocal summit in Seoul, Kim said, without mentioning his northern counterpart by name.
"I hope that Washington makes its best effort to resume talks with Pyongyang," he said. "Pyongyang should also engage in the talks with Washington more positively."
In contrast to last August 15, when the two Koreas marked the holiday with a shared spirit of giddy anticipation of family exchanges, there were no really shared celebrations this year.
The north's Korean Central News Agency said ceremonies were held across the country to celebrate liberation day, but the theme was one of unification based on the communist ideals of Kim Il-sung, the nation's founder, and his son Kim Jong-il.
"The honor and dignity of the country liberated and built b Kim Il-sung through all sorts of ordeals and trials are being remarkably increased by leader Kim Jong-il," KCNA said.
In Seoul, a day after the streets churned with anti-Japanese protests over Prime Minister Junichiro Koizumi's visit to a shrine to Japan's war dead, including convicted war criminals, Kim had sharp words for Tokyo.
"How can we make good friends with people who try to forget and ignore the many pains they inflicted on us?," he asked. "How can we deal with them in the future with any degree of trust?"
About 150 protesters, including elderly women forced to work as sex slaves for Japan's troops, staged a sit-in in a Seoul park. Several men scuffled with police near Japan's embassy.
As part of Independence Day celebrations, 350 motorcyclists from 27 countries, including Japan, Britain, France, Spain and Italy, were racing around a scenic mountain in North Korea, South Korean organizers said.
The rally began in Seoul on Sunday. After reaching South Korea's east coast, the racers and their motorcycles were ferried to the North's Diamond Mountain.
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