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President-Elect Barack Obama speaks about the current economic crisis hardships, and ways he plans to help combat them.

President-elect Barack Obama stepped carefully yesterday when he was asked about the unusual letter of congratulations that Iranian President Mahmoud Ahmadinejad sent him -- the first time an Iranian leader has congratulated the victor of a U.S. presidential election since the 1979 Islamic revolution.

"I will be reviewing the letter from President Ahmadinejad, and we will respond appropriately," he said, leaving open the question about whether he will reply. President Bush chose not to respond to a rambling 18-page letter he received from Ahmadinejad in 2006, but during the campaign Obama indicated he would be willing to meet with Iranian leaders.

"Iran's development of a nuclear weapon, I believe, is unacceptable," Obama said yesterday. "And we have to mount an international effort to prevent that from happening."

Diplomatic issues rarely begin or end cleanly with a change of administrations, but Bush will be leaving his successor an extensive list of foreign policy processes. The new administration will have to quickly evaluate them and decide whether to continue along Bush's path, make minor modifications or forge ahead in a different direction. Obama will inherit at least three foreign policy structures, built largely by Bush and Secretary of State Condoleezza Rice, aimed at thwarting Iran's development of a nuclear weapon, eliminating North Korea's nuclear arsenal and promoting Israeli-Palestinian peace talks.

During the campaign, Obama issued a series of foreign policy pronouncements that often appeared designed not to box himself in. One prominent exception was a pledge to remove most U.S. combat troops from Iraq within 16 months of his inauguration. But in many cases, Obama appears to have left himself wiggle room on many issues that will confront him. During the campaign, in fact, internal briefing materials purposely focused on defining the challenges facing the next president, but did not detail possible policy options, advisers said.

Eight years ago, when Bush took office, he famously pursued a policy dubbed "ABC" -- anything but Clinton. President Bill Clinton believed he was so close to a missile deal with North Korea that he nearly traveled to Pyongyang in his final weeks in office. But when Bush arrived in the White House, he quickly rejected following in Clinton's footsteps and opted for a confrontational approach.

Clinton passed up the North Korea trip to make an unsuccessful attempt at a Middle East peace agreement. The effort collapsed amid a wave of Palestinian attacks known as the second intifada, and Bush opted not to make a serious effort at a peace agreement until much later in his second term.

Obama campaign officials and advisers declined to discuss how they will handle the diplomatic initiatives Bush will leave behind, but Obama's leanings can be gleaned from his campaign statements.

In the Middle East last year, Bush began what is known as the Annapolis process, which seeks to encourage Israeli and Palestinian leaders to agree on the parameters of a peace accord. Rice has taken on the task of shepherding the effort, making almost monthly trips to the region to try to persuade the two sides to reach an agreement. Any progress that has been made has remained secret; both sides say the talks have been productive and far-reaching.

But the White House this week formally gave up any hope of achieving a peace accord between the Israelis and Palestinians before Bush leaves office. Analysts have criticized the Annapolis process for not finding a way to accommodate the interests of Hamas, which has been labeled a terrorist group by the State Department but which controls the Gaza Strip with nearly half of the Palestinian population. Rice has also been faulted for investing so much in the effort, to the detriment of other issues, that her clout has been diminished.

Obama has not indicated that he will offer any fresh thinking on how to deal with Hamas; at one point during the campaign, he accepted the resignation of an outside adviser who met with Hamas officials as part of his job for an international mediation group. But, during a visit to Israel in July, Obama said he would not wait "until a few years into my term or my second term" to seek a peace deal. This suggests that he may appoint a high-level Middle East peace envoy, freeing his secretary of state to concentrate on other issues.

On North Korea, Obama will inherit a process that is probably in worse shape than what Clinton left for Bush. In a dramatic change in approach during his second term, Bush avidly pursued a deal to end North Korea's nuclear weapons programs. But the effort nearly collapsed this fall before Bush agreed to remove North Korea from the State Department's list of state sponsors of terrorism.

Obama supported the decision to delist North Korea. During the campaign, he criticized Bush for taking so long to engage with North Korea, suggesting he would be eager to find ways to keep the disarmament process alive. Li Gun, a senior North Korean official, told reporters in New York on Thursday that "we are ready to deal" with the incoming Obama administration.

Obama may face some of his toughest choices on the diplomatic process concerning Iran. Rice has painstakingly assembled a coalition of six nations -- Britain, France, Germany, Russia, China and the United States -- to confront Iran, offering incentives if it will suspend its enrichment of uranium. The group has won approval for three U.N. Security Council resolutions sanctioning Iran, but Iran has shrugged off the pressure.

During the campaign, Obama offered to conduct direct talks with Iran, a statement that unnerved European allies invested in the diplomatic approach. Obama's comment yesterday that "an international effort" is required indicated that he would seek to build on the structure Rice assembled

South Korean protesters, with a defaced portrait of North Korean leader Kim Jong Il and North Korean flag, shout a slogan during a rally against the pro-North Korea policy of the National Intelligence Service (NIS) near the NIS headquarters in Seoul, South Korea, Tuesday, Oct. 28, 2008. Kim Sung-ho, head of the National Intelligence Service, Tuesday said that North Korean leader Kim's health appears to have improved.(AP Photo/Ahn Young-joon) (Ahn Young-joon - AP)

SEOUL, South Korea -- North Korean leader Kim Jong Il appears to have recovered enough from a stroke to run the country without difficulty, South Korea's spy chief said Tuesday, but Japan's prime minister said he likely is issuing orders from a hospital bed.

Prime Minister Taro Aso told lawmakers in Tokyo that his government had information that Kim likely remains hospitalized.

"His condition is not so good. However, I don't think he is totally incapable of making decisions," Aso said.

The head of South Korea's National Intelligence Service, Kim Sung-ho, told lawmakers in Seoul that the North Korean leader is "not physically perfect" but appears to remain in command.

South Korean and U.S. officials say Kim, 66, suffered a stroke, reportedly in August. North Korea has strenuously denied there is anything wrong him.

On Tuesday, North Korea's military warned the South to stop its "smear" campaign designed to discredit Kim and the Stalinist nation, threatening to reduce the country to rubble.

"The puppet authorities had better remember that the advanced pre-emptive strike of our own style will reduce everything opposed to the nation and reunification to debris," the North's military said in a statement.

The threat comes a day after North Korea demanded during brief talks at the Demilitarized Zone that South Korea stop activists from sending balloons filled with anti-Kim leaflets across the border. The South Korean government says it cannot prohibit them, citing freedom of speech.

The North also criticized remarks earlier this month by South Korea's Gen. Kim Tae-young, who told parliament that the military was prepared to attack suspected nuclear sites if the North tries to use its atomic weapons on the South.

Tensions on the divided Korean peninsula have been high for months with Pyongyang embroiled in an international standoff over its nuclear program and concerns mounting over the North Korean leader's health.

Kim disappeared from public sight in mid-August, missing a September military parade commemorating the 60th anniversary of the country's founding and sparking rumors about his health.

Kim, who inherited his country's leadership after his father's death in 1994, has allowed no opposition and has named no known successors, leading to concerns of a power vacuum or military scramble for leadership should he die.

North Korea has sought in recent weeks to tamp down rumors about Kim's health with news reports and footage portraying the leader as active and able, attending soccer games and inspecting military units. The reports, photos and video are undated.

Mercurial and reclusive, Kim has been known to stay out of public sight when tensions over North Korea's nuclear program are high.

He disappeared around the time the regime stopped disabling a reprocessing plant at Yongbyon in violation of a disarmament-for-aid deal over Washington's refusal to remove it from a list of nations that sponsor terrorism.

After a flurry of negotiations, Washington removed North Korea from the list and Pyongyang ended its boycott of the accord.

On Tuesday, the NIS said a North Korean soldier defected to the South through the heavily fortified DMZ _ only the second such defection in a decade.

More than 14,300 North Koreans have arrived in the South since the end of the 1950-53 Korean War, according to South Korea's Unification Ministry. Most travel through China and Southeast Asia before landing in South Korea.

In this undated photo released by Korean Central News Agency via Korea News Service in Tokyo Saturday, Oct. 11, 2008, North Korean leader Kim Jong Il, wearing glasses, stands with uniformed soldiers during his visit to a military unit in unknown location of North Korea. North Korea released pictures of Kim on Saturday for the first time in nearly two months. (AP Photo/Korean Central News Agency via Korea News Service) (AP)