After taking office, Eisenhower soon replaced General James Van Fleet, who had started arguing for an all-out invasion, with Lt. General Maxwell Taylor. No immediate progress was made in the negotiations other than the exchange of a few prisoners in March of 1953. In order to show strength, the Communists made an attack on Americans at "Pork Chop Hill" in April. Eisenhower was unfazed, and by the end of April talks were once again underway Panmunjom. On June 8, the two sides finally came to an agreement over the tricky POW (Prisoner of War) issue, outlining their solutions in a document call the "Terms of Reference." Under this agreement, those POWs that refused to return to Communist territory would be placed under the auspices of a neutral commission for a period of three months. If, after the end of those three months, the POWs still refused to be repatriated, they would be allowed to go free. With the POW issue solved, it seemed that a final peace treaty was in sight.
After the "Terms of Reference", however, the Communists pressed for some final negotiating leverage with a one-week offensive in June. And on a second front, the US had to deal with the problem of Syngman Rhee, who continued to spout promises about Korean reunification, and who promised to invade North Korea even if he only had the ROK army on his side. The US considered organizing a coup to remove Rhee from power, but never carried the action out. Instead, the US convinced Rhee to stop shouting for reunification by promising to intervene on South Korea's behalf if North Korea ever did invade, and by promising $1 billion in aid for South Korea's economic recovery after the war.
Despite these minor crises, agreement was finally reached at Panmunjom. On July 27, 1953, The UN, China, and North Korea signed an armistice. South Korea refused to sign, but with little effect. Under the terms of the treaty neither side would be allowed to increase the number of non-Korean military personnel stationed in Korea. The armistice also established a 2.5 mile wide buffer between North and South Korea along the 38th parallel, termed the "demilitarized zone." Within this zone, all troops and weapons were banished. In practice, however, the zone was heavily militarized, with over 1 million troops facing off. In fact, because South Korea never signed the armistice, the two countries remain technically at war even today.
After the war, North Korea and South Korea remained divided, a symbol of the effect of the Cold War similar to the division of Germany and Berlin. Families were broken up by the war and lived on opposite sides of the demilitarized zone, unable to visit or even communicate with each other.
Syngman Rhee's southern regime became even more dictatorial, and in 1960 he resigned after student riots. South Korea only became more unstable with his departure, and it is only in the last two decades that South Korea has really seen sustained economic growth. In North Korea, Kim Il-sung developed a full-scale personality cult, and ruled until his death in 1994. Tensions between the two countries remain to this day, perhaps seen best in North Korea's boycott of the 1988 Seoul Olympics, to which the USSR and PRC sent athletes. The legacy of the Korean War continues to haunt the United States, as the US worries about North Korea's possession of nuclear weapons.
Along with his vast military experience and easy-going attitude, part of Eisenhower's confidence in the spring of 1953 stemmed from the fact that the US had successfully tested an which was vastly more powerful than an A- Bomb, and had thereby surged ahead in the arms race with the USSR (the Soviets shocked the US by testing their own H-bomb in late 1953). Eisenhower considered nuclear bombs to be just another weapon and was considering using small nuclear bombs in Korea, especially because, for their price, they packed more punch than conventional weaponry. He never actually authorized their use, however.