"We have manufactured nukes to cope with the Bush administration's evermore undisguised policy to isolate and stifle the DPRK." This frank statement by the North Korean foreign ministry was the first explicit admission that it has nuclear weapons. It was accompanied by an announcement that the country has withdrawn from the six-nation talks on a settlement.
This poses a dilemma for the Bush administration on whether to crank up further pressure on the regime or try to revive the talks by offering economic concessions in return for a readiness to abandon such weapons. The fact that this escalation coincides with renewed determination by Iran to maintain its nuclear programme stokes up further tension on the issue.
It has always been difficult to interpret the real intentions of the secretive and paranoid North Korean regime. But there have been two basic schools of thought on how best to understand its motives and politics. The first assumes that it is driven by a fundamental need to survive following a disastrous famine in the 1990s, representing a comprehensive failure of Stalinist centralised planning. Reforms introduced in 2002 monetarised and decentralised the economy, introduced new profit and productivity incentives and opened up more trade across its borders with South Korea, China and Russia.
In return for help with the reforms from these countries, along with Japan and the United States, it has been assumed that North Korea is willing to be a rational partner on regional stability and nuclear weapons control. In this perspective, North Korea's regular outbreaks of brinkmanship are seen as perverse appeals for more aid and positional advantage disguised as threats. This latest outbreak will be seen by seasoned observers as a more vigorous expression of such behaviour.
An alternative view is not convinced that North Korea's tactics are so closely related to its economic and political needs to survive. It is a highly repressive and dangerous totalitarian regime, with a record of selling nuclear technology. It has an irrational streak which is best contained by explicit threats of military retaliation.
The Bush administration has oscillated between these two views without consistency. North Korea is a member of President Bush's famous "axis of evil" states and was recently described as an "outpost of tyranny" by Dr Condoleezza Rice. But the US has neither the resources nor the political will to enforce a containment policy on the other five states which want to engage North Korea.