* Pyongyang University of Science and Technology hurt by US ban on N.Korea travel
* PUST President Chon seeking return to Pyongyang after US-N.Korea detente
* School teaches western syllabus to offspring of Pyongyang elite
* Ties to evangelical Christianity have raised suspicions in N.Korea
By Ju-min Park
SEOUL, June 19 (Reuters) - When the only private university in North Korea held a commencement in March, the school's American president wasn't there, blocked by Washington’s ban on travel to the country.
Now, with the United States and North Korea reshaping relations between the two old adversaries, Pyongyang University of Science and Technology (PUST) President Yu-Taik Chon is hoping he will soon be able to return to his campus in the North Korean capital.
The release in May of two PUST employees and another U.S. citizen held in detention by the North helped open the door to last week's historic summit between North Korean leader Kim Jong Un and U.S. President Donald Trump.
The leaders agreed to work toward complete denuclearisation of the Korean peninsula while Washington committed to provide security guarantees for its old enemy and halted major military drills with South Korea that had irked the North.
Chon re-applied to the U.S. State Department for clearance to return to Pyongyang after the release of the PUST workers, both Korean-Americans detained on charges of committing unspecified “hostile acts”.
"Those detained are all free. There's no reason to block me any more," Chon told Reuters in an interview in Seoul.
"Fears over any kind of war are gone and the two countries' relationship is now totally different from what it was before."
Although the arrests of the PUST staff were not in connection with their work at the university, the incidents drew unwanted attention, said Chon.
"People thought that our school was a dangerous place."
The university took another hit from a travel ban in September which affected American staff who made up more than half of its 75 professors.
PUST was founded by and is chiefly funded by evangelical Christians, despite North Korea being a strictly atheist regime where proselytization is illegal.
School officials say Christian staff are forbidden to preach.
Still, one Western source who has worked in Pyongyang says the university's ties to the international evangelical community makes North Koreans suspicious, and often restrictive of what the school can do.
Nevertheless, the university teaches the progeny of the North Korean elite. About 550 students learn subjects ranging from capitalism to dentistry, all taught in English by an international faculty.
With Americans banned, PUST recruited about 50 professors mostly from Europe and China, Chon said. One Canadian electronics engineering professor held real-time online lectures via Skype with the students in Pyongyang.
Chon had recently held meetings with South Korean universities including Chonnam National University which are ready to send professors to teach at PUST as inter-Korean relations warm, said Chon and the university.
Nam Sung-wook, a professor of North Korean studies at Korea University, said PUST students are top scholars but also strongly ideologically supportive of the regime to minimise the risk of being subverted by Western ideas.
"Because it would have been a problem if they easily changed their ideological thinking," said Nam.
The university's graduates would be well positioned to bridge a gap between Pyongyang and Washington should the reclusive country be open to outside world, school officials said.
"There are 520 graduates and now 550 students. A total more than 1,000," said Chon. "They understand us and have global insights, the ones who can talk to foreign investors and negotiate with them."
A 77-year-old Pyongyang-born American, Chon spent 30 years in the oil industry working for companies like Gulf Oil Corp and BP, before teaching electric engineering in China and North Korea.
Every faculty member including Chon works for free, and many of the school's leadership are Korean-American evangelicals, including Chon himself.
Chon, who said he was inspired to help North Korea after a devastating famine in the mid-1990s, said daily life at the school underlined changes in recent years.
Once reliant on a Soviet-style centrally-planned economy, North Korea is now home to a thriving system of semi-legal but policed markets known as “jangmadang”, where individuals and wholesalers can buy and sell privately-produced or imported goods.
Now, three times a week, staff at PUST shop for groceries at a big market called Tongil Market to feed their students and officials.
The market has an upper story that houses some offices and a currency exchange booth where Chon says he switched his U.S. dollars for North Korean currency.
"I think the country has already changed a lot over the years. People are more interested in foreign countries and more relaxed when facing us," Chon said.
Despite sanctions, food and fuel prices have largely remained stable under leader Kim Jong Un as he leaves markets open, experts say.
PUST students have rare access to the internet and have opportunities to study abroad.
"We had tough times, under sanctions and all. But, now I think we can do things that we wanted to achieve in the first place, like contributing to making peace," Chon said, laughing.
Every month, the school puts a $10 credit on the students' cards, so they can buy items such as notebooks or water bottles at a shop inside the school.
Students even get pizzas delivered from outside the school for birthday parties, Chon said.
"Life here is a mystery to most of the world, but our students and our lives at school are not much different than others," Chon said. (Reporting by Ju-min Park; Additional reporting by Josh Smith and Heekyong Yang; Editing by Lincoln Feast.)