Seoul: North Korea could conduct a third atomic test next year to boost the credentials of its leader-in-waiting, while prospects for bilateral talks with Seoul are slim, a South Korean foreign ministry report said on Friday.
The regular report from a ministry research institute was published a day after Pyongyang vowed a nuclear "sacred war" after the South vowed to be "merciless" if attacked, and held a major military drill near the border.
The North, which carried out nuclear tests in 2006 and 2009, has yet to show it has a deliverable weapon as part of its plutonium arms programme, but a third test would raise tensions further on the divided peninsula and rattle global markets.
Nuclear experts have also said they expect a third test soon, while South Korean media reported earlier this month that the North was digging a tunnel in preparation for one.
"There is a possibility of North Korea carrying out its third nuclear test to seek improvement in its nuclear weapons production capability, keep the military tension high and promote Kim Jong-un's status as the next leader," the report said, referring to Kim Jong-il's youngest son.
"Tension between the two Koreas will remain high with chances of additional North Korean attacks on the South staying high. Chances of a summit meeting between leaders of the two sides look slim," the institute said, according to a summary of the report.
The analysis for 2011 was written by the Institute of Foreign Affairs and National Security, run by the Foreign Ministry.
BOASTING TACTIC
Hostilities have escalated to their worst levels since the Korean war in the early 1950s, after a deadly naval clash in March and the North's shelling of a South Korean island last month.
Still, the risk of an all-out war is low, and the North's threats of destruction are largely rhetorical.
The North's tactic of boasting about nuclear advances is a ploy aimed at restarting talks between itself, the South, China, Japan, Russia and the United States, from which it hopes to wring concessions, analysts say.
"Some form of meeting between six-party members could be held during 2011 to discuss North Korea's uranium enrichment, but chances are very low for any meaningful progress being achieved," the institute said.
Those involved in the six-party process say they want to resume it, but among them are widely differing starting points.
China, the North's only major ally and vital financial backer, sees the forum as the best place to begin dialogue, but Seoul, Washington and Tokyo say they first need proof that Pyongyang is committed to dismantling its nuclear work.
"North Korea has displayed national strength and diplomatic skills that exceed its actual capacity. Kim Jong's mental strength must be exhausted, and it is about time that China loses its patience," Seoul's Joongang Daily said in a commentary.
"The time has come for Seoul to strategically manipulate the North Korea-China alliance to encourage estrangement."