Lee outlined his policy regarding North Korea in his inaugural speech at the National Assembly, The Korea Times reported.

North Korea's denuclearization must be a precondition for any reconciliation of the two Koreas and South Korea's possible aid programs to be considered, he said.

"The leaders of the two Koreas must contemplate what they can do to make the lives of all 70 million Koreans happy and how each side can respect the other and open the door to unification," Lee said.

Lee said his approach toward North Korea would be "pragmatic," referring to his "Vision 3000" policy. Vision 3000 calls for providing economic assistance during the next 10 years to help North Korea become a more open economy and boost its per-capita income, The Times reported.

Lee's five-year presidential term formally began at midnight Sunday with the tolling of the Bosingak Bell, which was run 33 times, Yonhap News Agency reported. Lee, a former Hyundai chief executive, has committed to business-friendly policies, including easing restrictions and attracting foreign investment to the country.