U.S. Assistant Secretary of State James Kelly went to Pyongyang last October to hold the first high-level talks between the United States and North Korea since President Bush took office.

Tensions between the two nations were already high. President Bush had stopped the previous administration's ongoing talks with Pyongyang, but had never offered up an alternative policy. When President Bush famously stated his case for the war on terror, he described North Korea, along with Iran and Iraq, as constituting an "axis of evil."

A war of words followed, with the U.S. president describing North Korean leader Kim Jong Il as "a pygmy" and accusing him of "starving his own people." The North Korean media responded with equally unflattering descriptions of the U.S. leader.

But diplomatic sources say a peace initiative was on Mr. Kelly's agenda in October of last year, which would have involved the lifting of sanctions in exchange for an agreement from Pyongyang to freeze all programs related to weapons of mass destruction and to reduce the deployment of its vast conventional military.

But the Bush Administration had acquired evidence that North Korea was trying to produce highly-enriched uranium for use in nuclear weapons. Mr. Kelly told reporters in Seoul last October that this development was unacceptable. "I told the North that they must immediately and visibly dismantle this covert nuclear weapons program."

Mr. Kelly said after initial denials, the North Korean flatly acknowledged that they had such a program. North Korea later said it had never made the statement. But Washington did not buy it, and accused the North of violating a 1994 pact between Washington and North Korea called the Agreed Framework, in which Pyongyang agreed to freeze and dismantle its nuclear weapons program.

Scott Snyder, a Seoul-based representative for the Asia Foundation, says relations between the United States and the isolated Stalinist state have darkened. "What we have seen is a gradual process of crisis escalation on the part of the North Koreans following the revelation in October," he says. "Essentially that marked the beginning of the unraveling of the Agreed Framework."

The United States quickly stopped heavy-fuel shipments to the North - part of its commitment under the Agreed Framework. Pyongyang responded by expelling U.N. nuclear inspectors and withdrawing from the Nuclear Non-Proliferation Treaty

It also said it was restarting Yongbyon, its main nuclear facility located north of the capital. North Korea says it has reprocessed eight thousand spent fuel rods from its previously frozen reactors and is making nuclear bombs with the extracted plutonium.

Experts say if the claim is true, the North would have sufficient plutonium to make about six nuclear bombs within months. U.S. intelligence has long believed the North had already developed one or two. But Pyongyang says its is making more to strengthen its "nuclear deterrent" in the face of what it calls an ongoing threat of invasion from the United States. Washington has repeatedly denied that it has any such plans.

Ken Wells heads the Korean Studies Center at Australia National University in Canberra. He partially attributes North Korea's belligerence to its poverty. He says the stream of provocative actions and angry rhetoric encourage North Korean people to target their anger for the country's woes toward the United States instead of at the Kim Jong Il government.

"North Korea does not have really many bargaining chips in its hand so it has to rely on what it thinks is its strongest bargaining position," says Mr. Wells. "And that is simply that it will insist on its right to be able defend itself against any attempt to overthrow the nation or change the regime. And that it will therefore continue its nuclear armament program to do so."

Scott Snyder of the Asia Foundation says North Korea's behavior over the last year is also a way of drawing the world's attention and strengthening the North's negotiating position even though it has what he calls "a diplomatically weak hand." "What they have wanted for a long time is a changed relationship with the world and the United States," he says. "The problem is they want it on their terms and without much of a reciprocal engagement but without much willingness to adjust or change their own political system."

China and Russia - the North's only two major allies - along with the United States, Japan and North and South Korea, held an initial round of multi-party talks in Beijing in late August, but it ended only with a vague agreement to hold more negotiations.