Unveiling a 53-page report called "North Korea: A Phased Negotiation Strategy", the International Crisis Group called for diplomatic talks with the Stalinist state to be backed up by a "credible threat of force".

"North Korea probably has the materials, the capability -- and on present indications, the intention -- to make six nuclear weapons within a few months, and more than 200 by 2010," said ICG president Gareth Evans.

He said there was a "real, not fanciful" risk of North Korea exporting the weapons to other countries or terrorist groups, and warned of a nuclear arms race in north Asia.

"Getting Pyongyang off this track, while there is still time, is the single most important and urgent security task in the world today," Evans said.

The report was issued as South Korean officials announced that North Korea had dropped its demand for one-one-one negotiations with the United States and had notified regional players that it is ready to meet them in six-way talks.

The Brussels-based thinktank said any military conflict on the Korean peninsula, the world's last Cold War frontier, would be a "catastrophe".

"But ICG accepts that to be successful any diplomatic approach will have to be married with a credible threat of force," it added.

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