FACTBOX-The North Korea problem awaiting Obama

By Jon Herskovitz

SEOUL, Jan 14 (Reuters) - North Korea may be on the back burner when U.S. President-elect Barack Obama takes office next week but analysts said Pyongyang would be a major problem spot for him in his years in office.

North Korea late on Tuesday fired what appeared to be a final shot at the Bush administration by saying it would not give up its nuclear weapons unless Washington drops its hostile policies and establishes formal ties with Pyongyang.

U.S. Secretary of State-designate Hillary Clinton told a Senate committee she backed the multilateral disarmament talks set up under Bush, but also said Washington would "embark upon a very aggressive effort to try to determine the best forward to achieve our objectives with them".

The following are some scenarios of what may happen to the nuclear negotiations when Barack Obama becomes president.

SILENCE

North Korea's bureaucracy moves slowly and it will take time for Pyongyang to figure out how to respond to the new Obama administration. This means the North will likely drag its heels when it comes to clearing up pending issues in the nuclear talks with China, Japan, Russia, South Korea and the United States.

The latest snags in the sputtering disarmament-for-aid deal include the North's objections to nuclear samples leaving its borders and setting up a system to check its nuclear claims.

Obama will come to office with other pressing diplomacy problems including the war in Iraq, fighting in Gaza and Afghanistan, as well as dealing with the global ramifications of the financial crisis.

GIVING DISARMAMENT A CHANCE

North Korea's already weak economy will be dragged down even further the longer the nuclear talks are stalled because Washington has called for a suspension of most aid to North Korea for not abiding by the disarmament deal.

This could lead North Korea back to the bargaining table, where it might make concessions in return for the resumption of aid. North Korea could accept a verification system that allows international inspectors to visit the North's well-known nuclear plant at Yongbyon, which produces arms-grade plutonium.

North Korea would not allow inspectors to look into suspected secret facilities that make nuclear weapons or investigate U.S. suspicions it has a secret programme to enrich uranium for weapons, giving it another path to fissile material.

Analysts have said the North's military threat is the only real bargaining power leader Kim Jong-il has, without risking his control, to wring concessions from the world, and he is unlikely to dare give up nuclear weapons no matter what Obama does.

BRINKMANSHIP

North Korea might feel it can win more over the long term from Obama if it ups the stakes. In order to increase its leverage, the North could begin to restore operations at its Soviet-era Yongbyon nuclear plant and reverse disablement steps that were designed, in total, to put the facility out of business for at least a year.

The North's most likely priority would be restoring its facility that separates plutonium from spent nuclear fuel. Experts said the North could have it up and running again in a few months. There are discharged, irradiated fuel rods cooling at Yongbyon that the North could use to produce what experts said would be enough plutonium for one more nuclear weapon.

North Korea does not like to be ignored and may try to force Obama's hand by raising tension through test-firing missiles, or, in an extreme measure, conducting another nuclear test.

If it opts for brinkmanship, Obama may put North Korea back on a U.S. terrorism blacklist and restore trade sanctions.

LOOKING FOR AID

If one channel of aid for North Korea stops, Pyongyang often tries to open a separate one. So if it loses out on aid from the international nuclear dealings, it might try to warm up to South Korea, Japan or its biggest benefactor China.

South Korea may be the North's first choice.

North Korea threatened to reduce its rich South Korean neighbour to ashes last year after political wrangling led Seoul to suspend aid handouts that were roughly equal to about five percent of the North's estimated $20 billion a year economy.

North Korea could see some of that money return if it restores bilateral contacts or returns a few of the more than 1,000 South Koreans it has abducted or prisoners of war it did not return after the 1950-53 Korean War.

The North could also reach a deal that would bring back to life a South Korean-run resort just north of the border, which has been a source of foreign currency for Pyongyang's leaders.

South Korea suspended tours there after a North Korean soldier in July 2008 shot dead a South Korean housewife who supposedly wandered into a restricted area. (Additional reporting by Kim Junghyun; Editing by Jeremy Laurence)