Sunday, 29 December, 2002, 02:09 GMT
US warns N Korea of economic squeeze
Tensions are rising across the region
The Bush administration is threatening North Korea with economic collapse if the communist state continues with its nuclear programme.
In a process it defines as "tailored containment", the US says it will call on North Korea's neighbours and allies to cut economic ties with the country.
It says it will also urge the UN to impose sanctions - calling for the organisation to discuss the matter on 12 January.
The UN's nuclear watchdog on Saturday declared North Korea to be in "complete defiance" of its international obligations, after Pyongyang ordered the expulsion of its nuclear observers.
Mohamed El Baradei, the head of the International Atomic Energy Agency (IAEA), told the BBC he was making arrangements for the two inspectors to leave by Tuesday.
Arms sales intercepts
North Korea is in the midst of an escalating dispute with the United States, sparked by its alleged admission that it was resuming a nuclear programme, and retaliatory fuel sanctions by Washington.
16 Oct: N Korea acknowledges secret nuclear programme, US announces
14 Nov: Fuel shipments to N Korea halted
12 Dec: N Korea threatens to reactivate Yongbyon plant
22 Dec: N Korea removes monitoring devices at Yongbyon reactor
26 Dec: UN says 1,000 fuel rods have been moved to the plant
27 Dec: N Korea says it will expel UN nuclear inspectors
Timeline of tensions
US officials say they will ask Japan, South Korea, China and Russia to isolate the North economically.
The US has also raised the possibility of using its warships to intercept any North Korean arms shipments to reduce the country's income from arms sales.
A senior envoy from the United States is expected in Seoul within the next two weeks to co-ordinate Washington's policy towards the North with South Korea and Japan.
South Korea also plans to send envoys to two of the North's allies - Russia and China - "at the earliest possible date" in an attempt to persuade them to intervene.
Click here for map of key nuclear sites
BBC correspondent Tom Carver says that the White House is anxious not to be viewed as trying to strong arm North Korea's neighbours, and is instead hoping that they might decide to take these kind of steps on their own if the situation deteriorates any further.
He also says that putting economic and financial pressure on the country is the only real option the US has, as a military operation would not be a viable option at present.
On Friday, Pyongyang sent a letter to the IAEA demanding the withdrawal of observers, and announced it was reopening a nuclear reprocessing plant.
"They are setting a very bad precedent," said Dr El Baradei. "They are now in complete defiance of their international obligations."
"That will produce the plutonium that could be directly used in manufacturing nuclear weapons."
Although North Korea withdrew from the Nuclear Non-Proliferation Treaty in 1993, a year later it struck a deal with the US to freeze its nuclear programme and give access to IAEA monitors in exchange for fuel and aid.
Pyongyang has now renounced this deal - possibly, observers suggest, to pressure the US into signing a non-aggression pact and into stumping up more aid.
However, Washington has made clear that it will not start any negotiations until the new programme has been stopped.
Pyongyang insists however it needs the Yongbyon plant to produce electricity after the US stopped aid shipments of fuel oil.