North Korea said last month it had unloaded 8,000 spent fuel rods in a step towards building more atomic weapons, while US officials said they believed Pyongyang was preparing to conduct its first ever nuclear test.

A test would strengthen the hands of the hawks in the Bush administration wanting to ratchet up pressure on Pyongyang and make it more difficult for China and South Korea to continue to urge patience on Washington, said Robert Hathaway of the Woodrow Wilson International Center for Scholars.

In addition, a test would "almost certainly" signal the end of the six-party talks aimed at ending Pyongyang's nuclear weapons program, and spark US calls for North Korea to be referred to the UN Security Council, he said.

North Korea's closest ally China, and South Korea, both of which provide crucial aid to their northern neighbour, have rebuffed US calls to refer Pyongyang to the Security Council, a step which North Korea has warned would amount to a declaration of war.

The two Koreas, China, Japan, Russia and the United States have held three inconclusive rounds of six party talks. Sponsored by the United States and hosted by China, the last meeting was held in June 2004.

If North Korea disregards US warnings and tests a nuclear device, "Washington would increase its efforts to turn up the heat but I am not at all certain that either China or South Korea would neccesarily go along," Hathaway said.

Jon Wolfsthal, the deputy director for non-proliferation at the Carnegie Endowment for International Peace, said US warnings of an upcoming nuclear test were politically motivated.

"I don't think there is clear evidence North Korea is preparing a nuclear test. They are selectively using information to achieve their political aims. This is exactly what they did in Iraq and I think they are repeating it," he said.

According to satellite and other intelligence data, US officials believe Pyongyang is building a reviewing stand and filling in a tunnel, moves which they say are clear pointers to a potential underground nuclear test.

"All a nuclear test does is remove the image that American policy is anything but a failure," Wolfstal said.

However he ruled out a retaliatory military strike on North Korea.

"I think an attack is insanity," he said, citing North Korean retaliation that could affect the fate of about 32,500 US troops stationed in South Korea as well as the security of South Korea and Japan.

US Secretary of State Condoleezza Rice has warned of "significant deterrent capability" by the United States to thwart North Korea's nuclear moves, while National Security Advisor Stephen Hadley has said a test would be seen as a serious act of defiance that would face unspecificed action.

"The United States maintains significant, I want to underline significant, deterrent capability of all kinds in the Asia-Pacific region. So I don't think there should be any doubt about our ability to deter whatever the North Koreans are up to," Rice had said.

Test or no test, many analysts say, the Bush administration would eventually have to hold direct talks with North Korea.

"I have been saying for the last two years that the Bush policy on North Korea has demonstrably failed," said Charles Pritchard, the special envoy for talks with North Korea during president Bill Clinton's second term in office

"The concept of a multilateral framework is actually fine and is useful but it is insufficient to resolve the problem, it requires in addition to that a serious and sustained bilateral engagement between the US and North Korea," he said.

Pritchard said both China and South Korea were very supportive of a serious engagement by the United States and North Korea.

"You will find that the Chinese would be more willing to look at other options themselves once they see that the United States has made a good faith and serious effort to engage the North Koreans."