Proliferation challenge extends far beyond North Korea

WASHINGTON (Reuters) - North Korea's second nuclear test, which has the Obama administration scrambling for an effective response, poses a far greater proliferation challenge than merely figuring how to make Pyongyang change course.

Whether the United States can translate international condemnation of North Korea's second nuclear test in 2-1/2 years into concrete action will affect U.S. allies in Asia, nuclear powers like Pakistan and India and countries with suspected nuclear ambitions, such as Iran.

"North Korea's thrown something in our face that we have to deal with now and it could have tremendous ramifications for the ability to stop proliferation in the future," said David Albright, president of the Institute for Science and International Security, a nuclear disarmament think tank.

The former arms inspector said international failure to respond resolutely could embolden Iran in its suspected quest for a nuclear bomb, but also could see nuclear-armed Pakistan mimic the North in a test that might provoke India in turn.

State Department spokesman Ian Kelly said Washington sought a tough U.N. Security Council response and wanted to make North Korea "pay a price" through a mixture of multilateral and U.S. measures, which he did not spell out.

A U.S. Treasury Department official said that agency had broad authority to take action against North Korea and was weighing options for imposing financial sanctions.

The international record with North Korea's missile and nuclear tests shows that is easier said than done.

"North Korea proliferates to make money so you have to worry that in isolation, under sanctions, it will do more of it," said Albright. He noted that Pyongyang helped Syria build a nuclear reactor while under many international sanctions.

MOTIVES DEBATED

North Korea's reasons for defiant test range from tightening leader Kim Jong-il's grip on power ahead of an expected succession by his third son, to getting U.S. attention to simply building a better atomic arsenal, say analysts.

Henry Sokolski, head of the Nonproliferation Policy Education Center in Washington, said North Korea had made it clear it could perfect a Hiroshima-sized atomic bomb and that it was not willing to negotiate it away.

Monday's underground test yielded a blast of about several kilotons and was aimed at "improving their arsenal" -- a constant goal of the North Korean military after an October 2006 test that was less than successful, said Albright.

However, Sharon Squassoni of the Carnegie Endowment for International Peace, said North Korea had enough plutonium to do multiple tests if it were really keen to improve its weapons and the test was likely driven by Kim's power transfer plan.

"If it is really about succession then we will not be able to get them to the table," she said.

"RECIPE FOR WAR"

U.S. politicians, editorial writers and experts called for steps to ratchet up pressure on Pyongyang.

"The first thing to do is put them back on the terrorist list," said Sokolski, referring to a State Department blacklist that North Korea was removed from in October as a reward for earlier disarmament steps and pledges.

President Barack Obama could cite North Korean missile collaboration with Iran and help with Syria's nuclear ambitions and "do this in the next 10 minutes if he wanted to ... with the stroke of a pen," he said.

Such a step, followed by a squeeze on North Korea's finances, would reassure Japan. Tokyo has been dismayed at what it sees as U.S. softness on Pyongyang and is wary about Washington ceding regional security leadership to Beijing.

A U.S. official who asked not to be named said Washington was not giving serious thought to putting North Korea back on the list, which imposes sanctions including a ban on U.S. military exports and prohibitions on U.S. economic assistance.

Sokolski and other experts advise Washington to strengthen a U.S.-led program to intercept ships and planes suspected of carrying weapons of mass destruction. South Korea said on Monday it would join the Proliferation Security Initiative.

Albright, however, urged one last attempt at high-level diplomacy -- similar to a mission former U.S. President Jimmy Carter made to Pyongyang in 1994 to defuse an earlier crisis.

"Before moving to increase sanctions and generally escalate, a very senior person from the U.S. or China needs to go and meet Kim and find out what's going on," he said.

"A blind rush to isolate and sanction North Korea is a recipe for war," warned Albright.

(Additional reporting by Arshad Mohammed and Sue Pleming; Editing by Cynthia Osterman)