SEOUL, South Korea » Facing food shortages, severe price increases and social unrest, North Korea appears to have relaxed, at least temporarily, its broad crackdown on private markets, news reports and officials in Seoul said on Thursday.

If confirmed, the move to allow the buying and selling of goods outside the country's tightly controlled state distribution system could signal a political setback for the government of Kim Jong-il. North Korea had recently introduced a new currency and closed the country's private markets in an effort to restore a purer form of socialist central economic planning.

Indications that the country may be easing restrictions on trading follow reports this week that Kim had dismissed the official who oversaw the introduction of a new currency and the effective confiscation of private wealth in November. North Korea has not officially announced either development, and it was not possible to verify them independently.

In the past week, the news media and government officials in Seoul have reported rare public outbursts of protest in North Korea, though they emphasized that the episodes seemed isolated and that there were few signs of organized dissent.

By Thursday, North Korea had begun allowing trading in markets again, said the South Korean news agency Yonhap, citing unnamed sources familiar with the North Korean situation. Daily NK, a Seoul-based Web site that collects news from sources inside the North, also carried a similar report.

“;In the past few days, we have learned that market activities are coming back in the North,”; said a senior South Korean government official whose departmental regulations barred him from speaking on the record about the North. “;But we are not sure yet whether this is a policy reversal effective throughout the North or is some temporary adjustment.”;

Since 2005, North Korea had taken a series of steps aimed at suppressing the markets, like banning food sales outside the state's ration system, banishing young women from the markets and suppressing smuggling from neighboring China.

The strongest steps the government took against markets and the new class of traders who have profited from them began in late November when it abolished its old bank notes, requiring North Koreans to turn in their money for new bills at a rate of 100 to 1. By limiting how much they could turn in for the new currency to about $30 per person, the government wiped out much of private wealth, believing that that would help arrest inflation.

But prices of food and most other basic goods have since soared, as the state-run production and distribution system has not managed to meet demand.

Daily NK reported that after the government's lifting of the private trading ban, food prices in some North Korean towns began easing slightly. The Yonhap news agency reported that although markets reopened, people remained suspicious of the government's intentions.

It is unclear whether protests in the North have destabilized Kim's government, which has survived for years despite a dismal economy and a devastating famine without losing its grip on power.

Some analysts said the seemingly mistaken policies could have a lasting impact. North Korea's blunder with its currency reform “;carried the risk of making North Koreans frustrated and fundamentally skeptical about their system and authorities,”; said Cho Han-beom, an analyst at the Korea Institute for National Unification, a government research organization in Seoul.

He said a possible summit meeting being discussed between South and North Korea might be a signal of the North's need for outside aid to help defuse economic instability. The North's economic plight deepened under U.N. sanctions imposed after its nuclear test last year. International food aid has also decreased during the nuclear standoff.

Yet others said they doubted that unrest was especially widespread or threatening to the government.

“;People can protest, but large-scale protests are impossible in the North,”; said Lee Dong-bok, a former high-ranking intelligence official in Seoul.

Lee said North Korean villages were divided into tiny cells that allowed the party and military loyal to Kim to monitor each household and to block spread of information.

For years, North Korea has openly admitted food shortages, but it has blamed “;hostile”; U.S. policies that it said drove it to spend most its resources to build arms. In the past week, North Korean media quoted Kim as saying that he would redouble his efforts to fulfill the government's promise to feed its people with “;rice and meat soup.”;