Standing in neat rows on a snow-covered plaza, tens of thousands of North Koreans rallied for a stronger military.

PYONGYANG, January 7 (IslamOnline & News Agencies) - A defiant North Korea Tuesday, January 7, warned the United States it will consider economic sanctions a declaration of war, despite a final chance to resolve the crisis over its nuclear program offered by the United Nations atomic watchdog.

As South Korea pushed a compromise deal at talks with Japan and the United States in Washington, Pyongyang accused the U.S. government of using sanctions "aimed at isolating and stifling the DPRK," reported Agence France-Presse (AFP).

"Sanctions mean a war and the war knows no mercy," a commentary by the official Korean Central News Agency (KCNA) said.

"The U.S. should opt for dialogue with the DPRK (North Korea), not for war, clearly aware that it will have to pay a very high price for such reckless acts."

The comments - a response to the seizing of a ship bound for Yemen last month carrying missiles made in North Korea - came despite assurances by U.S. President George W. Bush the stand-off would be resolved peacefully as he hinted talks may be in the offing.  

Bush Favors Slow Pace

The White House, meanwhile, sought to defuse the worsening confrontation with North Korea, applauding the International Atomic Energy Agency's decision to condemn North Korea's nuclear activities but delaying taking the issue to the United Nations Security Council for sanctions.

Bush repeated three times on Monday, January 6, that he had no intention of attacking North Korea - an effort, it seemed, both to give the North a security guarantee and ease a diplomatically embarrassing difference with South Korea and Japan over how to handle the crisis, according to the New York Times.

"I'll repeat that," Bush told reporters after a cabinet meeting Monday to start off a new year of domestic and international initiatives, "We have no intention of invading North Korea."

Only a week ago, as Bush vacationed in Texas, his aides were saying they would support the atomic energy agency in taking the issue straight to the Security Council, which would then consider economic penalties.

Now that approach appears to have been reconsidered.

In recent days, some senior officials have warned that penalties could prompt a military response from the North - just as the administration is preparing forces for a looming war on Iraq.  

North Koreans Call for Military Buildup
   
Continuing their defiance, North Koreans held a huge rally in the capital Pyongyang Tuesday to support its military build-up, official media said, with the communist regime under pressure to renounce its nuclear ambitions.

More than 100,000 people braved freezing temperatures to join the rally led by Premier Hong Song Nam and other ranking officials, KCNA reported.

The crowd pledged "to step up the general advance in the new year under the army-based revolutionary leadership of Kim Jong Il" during the rally held in a Kim Il-Sung square, named after current leader Kim's father.

Ryang Man Gil, chairman of the Pyongyang city people's committee, "underscored the need for the Pyongyang citizens to consider the military affairs as the most important state affair, exert utmost efforts to increase the national defense capacity and expand the ranks of active helpers to the army," KCNA said.

South Korean meteorologists said the crowd must have braved freezing temperatures, which plunged to around minus 18 degrees Celsius (-0.4 degrees Fahrenheit) in Pyongyang Tuesday.

A report Tuesday by the South Korean-based Korea Institute for International Economic Policy said the cash-strapped North was diverting ever more funds towards its one million-plus strong army.  

No swift End: Analysts
 
While South Korean political leaders may be confident they can broker a deal between Pyongyang and Washington, analysts warned that there seemed little likelihood of an early end to the nuclear standoff, according to AFP.

The transition of power in South Korea, the United States' preoccupation with Iraq and the North's desire to drive a wedge between Washington and Seoul will all conspire to keep the situation festering for some weeks to come.

"This thing will take some time," said Yoon Young-Soo, an expert in North Korean affairs at Seoul's Kookmin University.

"You have the Iraq problem and the transfer of power from President Kim (Dae-Jung) to president-elect Roh Moo-Hyun. Until then there will be no drastic changes."

Officials from the outgoing administration have traveled to Washington to push a compromise plan that would involve the U.S. giving North Korea a written assurance that it will not attack after Pyongyang promises to honor its nuclear commitments.

However, Kim Seng-Hwan of Seoul's Myongji University said that it was highly unlikely that any deal will be hammered out until the handover is completed as both North Korea and the United States would want to deal with Roh's team.

"I do not think that Pyongyang will take a position until that time as it wants to deal with the new administration," he said.

"Seoul and Washington have also not clearly coordinated their policy" as Roh has yet to visit Washington.

Yoon said that North Korea was likely to go along with the proposals from the South.

"Kim and Roh have said with some confidence that they can solve the problem so I suspect there has been some kind of communication and understanding between North and South Korea," he said.

But he also predicted that any resolution would only follow the transition.