North Korea likely to demand a price for Olympic participation

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"The United States should know that the button for nuclear weapons is on my table", he said during the nationally televised speech, according to a provisional translation by The Associated Press.

This shows that Kim does not intend to abandon the development of nuclear weapons and intercontinental ballistic missiles (ICBMs).

In his New Year's address on January 1, North Korean leader Kim Jong-un voiced his willingness to send a delegation to the Pyeongchang Winter Olympics and to hold inter-Korean talks to achieve that end. However, Kim appeared to extend an olive branch toward South Korea, wishing it success in the upcoming Winter Olympics in Pyeongchang.

"I repeat, the government is open to talking with North Korea, regardless of time, location and form".

Revere said Kim Jong Un's speech contained the strongest defense of North Korea's status as a permanently nuclear-armed country he had seen.

Rather than encouraging USA measures that "threaten the security and peace of the Korean peninsula", Seoul should instead respond to overtures from the North, and "stop nuclear war exercises with foreign forces", Kim said.

He cautioned however that "as long as an unstable state which is neither war nor peace continues, the North and the South can not guarantee a success of the Olympics, sit down for talks or move forward for reunification".

"It is quite noteworthy that the North's leader himself says the North is willing to participate in Pyeongchang", Professor Yang Moo-Jin of the University of North Korean Studies in Seoul told AFP.

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Kim said it is imperative to lower military tensions on the Korean peninsula and improve ties with the South, adding the path to dialogue was open. In his address, he also called for warming relations with South Korea.

North Korea conducted its sixth and most powerful nuclear test in September and launched its most high-tech intercontinental ballistic missile in November, ignoring worldwide condemnation and steadily tightening sanctions.

The annual new year's address is closely watched for indications of the direction and priorities Kim may adopt in the year ahead.

"I hope the Unification Ministry and the Ministry of Culture and Sports will swiftly come up with follow-up measures to quickly restore South-North Korean dialogue and realize the North Korean delegation's participation in the PyeongChang Olympics", the president said in a Cabinet meeting held at his office Cheong Wa Dae.

Beyond listing military accomplishments, Kim also outlined economic gains as part of his two-pronged policy of developing his country's economy and military.

While Kim is keen to declare his weapons programme a success, he is unlikely to completely end his contentious testing regime, said Scott LaFoy, a ballistic missile analyst at the website NK Pro, which monitors North Korea.

"We welcome it", a statement said. More important than scrutinizing North Korea's motivations is having the confidence to bring about a change in North Korea's attitude and to take advantage of that change.

The Winter Olympic main venues are just 80 kilometres (50 miles) from the heavily fortified border with the North and the build-up to the event has been overshadowed by tensions running high over the Pyongyang's escalating nuclear and missile tests.