Updated at 10:45 a.m. EDT, August 28, 2018

SOKCHO, South Korea — North Korea has deepened the wedge between the United States and its South Korean ally with a reported letter to Secretary of State Mike Pompeo telling him, in effect, our way or the nuclear highway.

The letter from the vice chairman of North Korea’s Workers’ Party, Kim Yong Chol, insisted the U.S. must agree to a “peace declaration” formally ending the Korean War or Pyongyang won’t do a thing about getting rid of its nuclear warheads and the facilities for making them.

CNN and Josh Rogin in The Washington Post report that because of the letter President Donald Trump cancelled last week what was to have been Pompeo’s fourth mission to Pyongyang.

The letter also serves as a warning to South Korea’s President Moon Jae-in, who has joined the call for a “peace declaration” in place of the armistice that ended the Korean War. North Korea’s state media have issued a series of commentaries making it clear that Moon, wedded to the U.S. alliance, needs to intensify the pressure on Trump.

This comes as many South Koreans, including some of the country’s leaders, think U.S. President Donald Trump’s ability to resolve the nuclear standoff with the North is waning, and their confidence in their longtime American ally is fading. But Kim Jong Un? He seems unable to do wrong in their eyes.

The North Korean ruler has developed successfully a mystique: that he, not Trump, can resolve the differences that divide the Korean Peninsula, and the implications for diplomacy—and ultimately for war or peace—are profound.

“ Moon’s top priority when he meets Kim again will be to persuade him of the need for a second summit with Trump. ”

No doubt Kim’s strategy all along has been to drive a wedge between Seoul and Washington, fully aware that the liberal South Korean President Moon Jae-in, after nearly a decade of conservative rule, aspires to reconciliation, not confrontation. But even Kim might be surprised by his success thus far.

As Moon prepares for another summit with Kim next month in Pyongyang, the third since April, the North Korean ruler comes across to the man on the street as a nice guy bestowing blessings, while Trump blows hot and cold. “People don’t bother about Kim very much,” says Kang Sung-un, an office worker. “It’s Trump and the Americans the media worry about.”

Kim’s aura of munificence was enhanced by another round of reunions bringing together families divided by the Korean War—the first encounters of the sort in nearly three years and the 21st time they’ve been arranged since such get-togethers were agreed on in 2000 by Kim’s father Kim Jong Il and South Korea’s then-president, Kim Dae-Jung.

Several hundred South Koreans got to spend three days and two nights at the North Korean east coast resort of Mount Kumgang.

The South Koreans who participated (a tiny fraction of the 57,000 South Koreans survivors who registered for the reunion more than 65 years after the war), returned here full of praise for Kim for approving the reunions, seen as another step on the way to North-South reconciliation.

“We expect more [family] visits,” said 73-year-old Choi Don-un, a retired pharmacist, after spending 12 hours with his 80-year-old sister. “They are sincere. Kim will do as promised with Trump. Things are getting better.”

The North Koreans, for their part, were well briefed beforehand not to speak ill of conditions at home. “We heard about North Korean life,” said Choi’s grandson, Choi Jong-yun, 25, who accompanied him there. “It is about like South Korea.” Of course, he conceded, “they always praise Kim Jong Un”—a ritual that opens every meeting.

“ Top U.S. officials play up the historic U.S.-South Korean alliance as though nothing could go wrong. ”

The president of the South Korean Red Cross, Park Kyung-seo, responsible for organizing the South Koreans, said he believed the reunions were “90 percent for humanitarian principles” while “indirectly moved by political dynamism.” He hoped that he and his North Korean counterpart had come to an understanding for another round in October regardless of “political circumstances,” meaning Kim’s view of what he expects to gain in the great bargaining game.

“Before, we cannot go to the North for political reasons,” said Kim Sang-ahn, at 50 among the youngest in the group, seeing a cousin he had never met. “Nowadays the situation is better and better. President Moon has a mind to see a good situation. He wants to unite North and South Korea.”

For the present, Moon’s top priority when he meets Kim again will be to persuade him of the need for a second summit with Trump, but Kim may not be so eager. Kim Yong Chol’s letter to Pompeo reportedly made clear the North Korean position was immutable and he could expect no change if he went to Pyongyang again. At the same time, North Korea’s propaganda machine has gone into overdrive, attacking the U.S. for “double-dealing attitudes” and “hatching a criminal plot to unleash a war against the DPRK”—Democratic People’s Republic of Korea..

The North’s state media avoids singling out Trump by name for criticism, but the rhetoric has South Korean leaders, and many others, wondering if the goodwill generated in Kim’s meeting with Trump in Singapore in June is fast dissipating. Moon himself faces rising pressure from the North to ask the U.S. to make significant concessions, doing away with sanctions imposed by the U.S. and U.N. after the North’s missile and nuclear tests.

Some observers despair of any resolution while the North insists the U.S. yield on these key issues, including the “peace declaration” formally ending the Korean War.

“Nothing will work,” says Kim Kisam, a former analyst with the South’s National Intelligence Service, now living in the U.S. “The North Koreans think the South Koreans are nothing to them. They think they have already defeated the South Koreans.”

A dispute between the U.S. and South Korea over the South’s plan to open a liaison office in the Kaesong Industrial Complex inside North Korea near the truce village of Panmunjom shows deepening differences between the U.S. and South Korea. The complex was shut down nearly three years ago by Moon’s conservative predecessor, Park Geun-hye, the ex-president who’s now in jail on massive corruption charges.

American officials, reluctant to confront Moon and his top advisers, are saying allocation of funds needed to open and maintain such an office would represent a serious violation of sanctions. The South Koreans say the money going into North Korea would only be used to maintain the office but, in a concession to the U.S., are now “reviewing” the idea.

Americans are also saying that Moon is playing into North Korean hands by building up his impending summit with Kim, talking about inviting national assembly members to accompany him..

The timing of Moon’s mission to Pyongyang will be tricky. There’s been no firm date set, but it’s likely to be after September 9, the holiday on which North Koreans celebrate the 70 th anniversary of the founding of the DPRK with a massive military parade showing off a panoply of missiles and other hardware. The summit should also be timed before the U.N. General Assembly in New York later in September in case Kim wants to go there to address the same body of world leaders who heard Trump denounce him a year ago as “little rocket man” for his threats to fire nuclear-tipped missiles at the U.S.

Top U.S. officials play up the historic U.S.-South Korean alliance as though nothing could go wrong. “This alliance is more than a partnership or friendship,” the new U.S. ambassador, Harry Harris, a retired admiral who previously commanded U.S. forces in the Pacific, told a gathering in Seoul. “It’s a camaraderie that has lasted for generations and will continue for generations to come. I look forward to bolstering our alliance, the linchpin of our security in Asia.”

Those words, however, ring a little hollow in an atmosphere of pervasive doubts about the relationship. “It is political games that they are playing,” says Signe Poulsen, Korean representative of the U.N. Office of High Commissioner for Human Rights. “These reunions are something tragic, something North Korea knows South Korea really wants. It becomes a bargaining tool when it should never be.”

U.S. policy-makers, notably National Security Advisor John Bolton, see a peace declaration such as the one demanded in the recent North Korean letter as a step toward a peace treaty – to be followed by demands for withdrawal of most of the 28,500 U.S. troops in Korea and dissolution of the U.N. Command under which the U.S. and South Korea, along with contingents from 16 other nations, waged the Korean War.

Gen. Vincent Brooks, commander of U.S. Forces Korea as well as the U.N. command, said in answer to my question when he talked recently at the Seoul Foreign Correspondents’ Club that the meaning of such a declaration “has to be understood in advance” and “there are elements we have not worked out” – presumably including the future of the U.N. Command set up at the outset of the Korean War.

In the great game of North-South relations, Gen. Brooks looks back on his 28 months as commander of U.N. Forces Korea and the U.N. Command as “a roller coaster ride” in which he could “never be completely certain what will come the next day.”

Brooks tries to take the broad view. “It’s important to have some degree of empathy as to where my adversary is coming from,” he told a gathering at the Seoul Foreign Correspondents’ Club. “I seek to understand why North Korea is doing what it’s doing.”