"One of the things they're very good at is negotiating with others," President Lee Myung-bak told a joint news conference here after talks with Australia's prime minister.

"Now we have a new US administration under President (Barack) Obama and we are trying to figure out a way for the future of the six-party talks," he said.

This and other factors "would give the North Koreans a reason to try to seek a more positive position for them on the negotiating table, so that could be a reason why they decided to continue to threaten to test fire a missile."

North Korea has said it will fire a rocket to put a satellite into orbit, but the United States and South Korea believe it is a pretext to test a missile that could theoretically reach Alaska.

They say any launch would breach a UN resolution adopted after Pyongyang's last missile test in 2006.

Prime Minister Kevin Rudd said Australia fully supported South Korea's policies "in dealing with these threats from the north" and urged Pyongyang to adhere to the security council resolution.

"It would be very wise for the regime in Pyongyang to get back properly to the negotiating table through the six-party talks and to adopt a reasonable posture to bring about a long term peaceful solution to the Korean peninsula," he said.

Under a landmark six-nation deal in 2007, North Korea agreed to scrap its atomic weapons programmes in exchange for badly needed energy aid.

But the talks, also involving the United States, Russia, South Korea, China and Japan, became deadlocked late last year when North Korea balked at demands to allow moves to verify its disarmament.

Lee, who is on the second stop in a three-nation tour which started in New Zealand and ends in Indonesia, also criticised any moves towards an arms race in the region.

Responding to a question about China's plan to increase military spending by nearly 15 percent in 2009, he said he did not have details of the move announced Wednesday, but added:

"In north-east Asia it is not desirable to have countries engaging in a race for military build-up or increasing their military spending -- the region is very dynamic and volatile."

earlier related report
NKorea holds more talks with US-led forces
Military officers from North Korea and the US-led UN Command held more talks Thursday on easing tensions as the communist state renewed claims that an upcoming military exercise is a prelude to war.

The colonel-level meeting set the agenda for a second round of talks at general-level on Friday, the United Nations Command said in a statement.

The meeting at Panmunjom, inside the Demilitarised Zone which splits North and South Korea, lasted for 45 minutes, a Command spokesman told AFP.

Generals from the two sides met Monday for the first such talks in almost seven years, but sources said the North used the occasion to criticise the March 9-20 military drill.

The annual joint exercise will this year involve a US aircraft carrier, 26,000 US troops and more than 30,000 South Korean soldiers.

The "slightest" military conflict which may break out during the exercise can rapidly develop into "a thermonuclear war," the North's government newspaper Minju Joson said Thursday.

North Korea is ready for "merciless and powerful retaliatory actions," it said.

Fears of a border clash have grown after the North on January 30 scrapped peace accords with Seoul and warned of war.

North Korea is also preparing to fire a rocket for what it calls a satellite launch, although Seoul and Washington say the real purpose is to test a missile that could theoretically reach Alaska.

A US-led UN force fought for the South in the 1950-53 Korean war. The United States still stations 28,500 troops to back up Seoul's 680,000-strong military against the North's 1.1 million-member armed forces.

Pyongyang complains each year about the exercise, which the UN Command says is purely defensive. But tensions are higher than normal this year and Seoul's troops are on alert for possible border clashes.

The North is angry at South Korea's conservative leader Lee Myung-Bak, who scrapped his predecessors' policy of offering virtually unconditional aid to Pyongyang.

The new US envoy on North Korea, Stephen Bosworth, is touring China, Japan and South Korea this week. He will discuss ways to dissuade the North from a launch and try to persuade it to resume stalled nuclear disarmament talks.

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