Mixed intelligence reports have only added to the confusion in what some see as a dramtic game of bluff being played by the isolated country.

Others are convinced it has nuclear capabilities and could pose a serious global threat.

North Korea is demanding direct dialogue with the US over security issues, but so far President George W Bush has insisted on multi lateral talks.

The White House has said it is evaluating North Korea's claim to have reprocessed 8,000 nuclear fuel rods to extract plutonium for nuclear weapons.

Spokesman Scott McClellan said North Korean officials had informed US officials in New York last week that they had completed the process.

There has been no independent confirmation from Pyongyang.

"It's not something, at this time, that we can confirm the accuracy of, but we are evaluating it," McClellan said.

 

"It's a serious matter, and that's why we are working closely with the countries in the region and others," the spokesman added. 

On Tuesday, a South Korean government spokesman admitted there was "no scientific evidence" that showed North Korea reprocessed all its spent nuclear fuel rods.

Analysts believe if those fuel rods were efficiently converted, they could produce enough plutonium for a half-dozen nuclear weapons.

 

Peaceful solution

 

President George W Bush has vowed not to tolerate a nuclear-armed North Korea and McClellan noted the US leader has not taken military action off the table as a matter of policy, but seeks "a diplomatic solution."

 

"What we won't do is let North Korea blackmail us," he added, indicating the latest revelation would not force the US to sit down for bilateral talks it has rejected.

  

North Korea insists it speak directly to the US about the standoff over its nuclear weapons programme, while Washington wants to include Seoul and Tokyo in talks.

 

North Korea and the US have been in a standoff since October when Washington said Pyongyang admitted to having a covert nuclear weapons programme - in violation of a 1994 pact.

 

Multilateral talks

 

A Japanese daily said on Wednesday North Korea told the US it would agree to multilateral talks if Washington guaranteed not to undermine Kim Jong-il's government.

   

The Tokyo Shimbun newspaper quoted an unnamed Chinese government source as saying North Korean diplomats at the UN made the proposal when they held unofficial talks with US counterparts on 8 July.

 

"We would be ready to accept five-nation talks if a promise was made to guarantee (the survival of) the regime," the daily quoted a North Korean diplomat as telling US officials.

 

China sent an envoy to Pyongyang this week in an apparent attempt to bring North Korea to the table.

 

Beijing supports a multilateral framework for the negotiations that would allow for bilateral meetings on the sidelines, a Chinese Foreign Ministry official said.