North Korea may opt for tensions over U.S. peace offer

SEOUL (Reuters) - North Korea may feel it can extract more from the international community by raising tensions than by accepting Washington's olive branch of normal ties in return for scrapping its nuclear arms program.

The North, while likely to welcome the U.S. gesture, probably believes it will have a better bargaining position over the long term if its first steps toward the new Obama administration are provocative and not conciliatory, analysts said at the weekend.

In a speech on Friday, U.S. Secretary of State Hillary Clinton offered North Korea a peace treaty, normal ties and aid if it eliminated its nuclear weapons program. There has been no response yet from Pyongyang.

Clinton's offer, made before she visits key Asian nations including South Korea this week, follows a month of angry rhetoric from Pyongyang at the government in Seoul and reports the North is preparing to test-fire its missiles.

"The Obama administration is clearly sending the signal that it is serious about negotiations and testing the North Koreans to see if they are serious," said Peter Beck, a specialist in Korean affairs at the American University in Washington.

Clinton's statement marked a continuation of former President George W. Bush eventual policy on North Korea, but the early call for talks is a sharp departure from Bush who began his term by trying to isolate the impoverished and reclusive state.

Clinton also said she hoped North Korea, which is reported to have made preparations to test its longest-range missile, would not engage in what she called "provocative" actions that would make it more difficult to work with Pyongyang.

"North Korea may be looking to stir things up early in the Obama administration by testing its weapons systems to increase its bargaining leverage," said a diplomatic source in Seoul.

South Korea has not commented on Clinton's statement. Neither has Japan nor China, countries Clinton will also visit, but all three capitals are likely to welcome the positive tone on a subject expected to feature high on her agenda.

The South Korean President Lee Myung-bak has infuriated his destitute neighbor by cutting off what once had been a free flow of unconditional aid shortly after taking office a year ago.

PREPARATIONS FOR KIM'S BIRTHDAY

In Pyongyang, North Korea is busy preparing to celebrate the 67th birthday of leader Kim Jong-il on Monday.

But a pro-North Korea newspaper published in Japan that has close ties to the North's leaders said at the weekend that Pyongyang feels the United States is still making hostile moves toward it through its military presence in South Korea.

"Ahead of Clinton's visit to Asia, the media has made noise about North Korea preparing to launch long-range missiles, but they have never told of the serious military movements the U.S. and South Korean armed force were making," the paper said.

Zhang Liangui, a Chinese expert on North Korea at the Central Party School, a leading institute in Beijing, said the friendly words from Clinton were unlikely to prompt Pyongyang to shift its stance on nuclear weapons or defer any missile tests.

"North Korea has its own rules of behavior and its own objectives for developing nuclear weapons and testing missiles. Some people say the goal of the missile test is to pressure other countries, to enhance the North's influence," Zhang said.

"But I think their real goal is very simple -- they really want to have nuclear weapons and missiles. That's their basic policy, and it's not going to change, certainly not because of a speech."

He said Clinton's visit may weigh on the North's decision on when to test missiles, but added the tests would go ahead.

North Korea, which for years has used its military threat to squeeze concessions out of regional powers, has dragged down international nuclear disarmament talks by failing to agree to calls that it accept a system to check its nuclear claims.

The North tested a nuclear device in 2006.

Officials in the South said North Korea might also soon fire short-range missiles, which can be set off with little notice, toward a disputed Yellow Sea border off the west coast of the peninsula that has been the scene of deadly naval clashes.

The North has been assembling its longest-range Taepodong-2 missile and could launch it by the end of this month, the South's biggest newspaper said last week quoting intelligence sources.

"The ball is clearly in North Korea's court," added Beck.

(Additional reporting by Kim Yeon-hee in Seoul and Chris Buckley in Beijing, Editing by Dean Yates)