South Korea and the United States agreed a new nuclear cooperation pact Wednesday that stopped short of granting Seoul the permission it had sought to start reprocessing spent nuclear fuel.

But Seoul welcomed the deal, saying it provided a framework for improving spent fuel management and boosting nuclear exports.

The new pact, which replaces an existing 1974 accord, was struck after four-and-a-half years of intense, drawn-out negotiations.

The main sticking point had been South Korea's desire to develop uranium enrichment and reprocessing capabilities in order to address concerns about energy security and the management of spent nuclear reactor fuel.

Seoul says its storage facilities for spent fuel will reach capacity in 2016.

Long-standing US policy opposes the spread of such capabilities because they can be used to produce weapons-grade nuclear material and therefore pose a significant proliferation risk.

A South Korean statement on the new deal was short on specific detail but suggested it opened the door to reprocessing sometime in the future, by allowing South Korea to conduct "research" into spent fuel management.

That includes research into "pyroprocessing" -- a new technology considered largely proliferation resistant, since the product is thermally and radioactively far too hot to use for a weapon.

"We established a pathway to lift some restrictions on activities in Seoul-owned facilities and to allow certain activities in the future," the statement from the foreign ministry said.

Seoul put a positive spin on the accord, with South Korea's ambassador for nuclear energy cooperation, Park Ro-Byug, telling reporters it marked "significant progress" from the existing pact.

A US statement said the deal reaffirmed the two countries' "shared commitment to nonproliferation as the cornerstone of their nuclear cooperation relationship".

The deal was signed by Park and the US ambassador to Seoul, Mark Lippert, and will now go through an internal review process in both countries prior to ratification.

South Korea is a key US military ally and analysts say Washington's concerns on allowing reprocessing stem less from a distrust of Seoul's ultimate intentions than from the impact it might have on negotiations with other countries.

There are also worries that wider concessions on reprocessing could further complicate efforts to roll back North Korea's nuclear programme.

Currently, Japan is the only non-nuclear weapons state that has both the technical capability and international permission to operate a commercial spent-fuel reprocessing programme.

Seoul had argued that allowing Japan to reprocess while denying South Korea the same concessions, smacks of double-standards, but Japan was forced to accept highly intrusive safeguards and, US officials point out, it doesn't have North Korea on its border.

South Korea is the fifth-largest consumer of nuclear energy in the world, and relies on 23 nuclear reactors to meet about 30 percent of its annual power needs.

It has sought to become a leading exporter of nuclear power plants since it won a $20 billion deal in 2009 to build nuclear reactors in the United Arab Emirates.