Overall relations between South Korea and the United States are expected to remain healthy in the coming years but budget constraints on both sides may strain the alliance, a recent U.S. congressional report said.

A new approach toward North Korea by South Korea's Park Geun-hye administration is also a potential source of friction, according to the Congressional Research Service (CRS).

"Considered by most analysts to be a strong supporter of the alliance, Park is expected to continue close defense coordination with the United States despite her campaign promises to engage North Korea more than her predecessor (Lee Myung-bak)," it said in a 39-page report on South Korea-U.S. relations. "For both sides, however, the alliance faces a range of budgetary issues."

In the latest budget plan, approved by the National Assembly in January, the Park administration cut defense procurement funding proposed by the previous government despite worries that it could hinder some military cooperation projects with Washington.

The U.S. is confronted with a bigger budget problem, struggling to slash military spending.

The Pentagon is said to be seeking to pass more financial burden on to South Korea for the stationing of around 28,500 American troops in Korea.

"The U.S. Congress has also voiced concern about the price tag for the troop relocation and tour normalization plans," the CRS said.

Seoul and Washington plan to start a new round of talks in May or June on the Special Measures Agreement on splitting the financial burden.

The CRS said it remains uncertain whether the Barack Obama administration will fully support Park's approach towards the North.

"It remains to be seen whether her calls for a new combination of toughness and flexibility toward Pyongyang will challenge Washington and Seoul's ability to coordinate their policies," it said.

Park has promised to try a set of confidence-building measures with Pyongyang as part of "the Korean Peninsula Trust Process." Her government has openly offered dialogue with the North to diffuse tensions.

She also hinted that her administration will delink humanitarian assistance from overall diplomatic developments.

One problem is that Park's concrete strategy on North Korea is still unclear, according to the CRS.

"Likewise, an issue for the Obama Administration and Members of Congress is to what extent they will support -- or, not oppose -- any initiatives by Park to expand inter-Korean relations," it said.

The institute also said the allies have yet to resolve the issue of revising an accord on bilateral civilian nuclear cooperation.

As they failed to strike a deal on Seoul's pursuit of enriching uranium and reprocessing spent fuel on a longer-term plan, the two sides announced a two-year extension of the existing deal, set to expire in March 2014. (Yonhap News)