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The United States promised to remove Pyongyang from its list of state sponsors of terrorism if the North submitted an accounting of its nuclear activities, part of multinational efforts to get the defiant country to abandon its nuclear ambitions.
However, an initial 45-day deadline for Washington to de-list Pyongyang passed on Aug. 11 as the North has failed to agree on a comprehensive verification protocol for its nuclear weapons programs.
In its first reaction, the North described the U.S. delay as a "violation" of a six-party denuclearization deal. "This is obviously a violation of the principle of 'action for action' essential for realizing denuclearization," the North's Korean Central News Agency said.
The six-party disarmament process has been delayed because of Washington's "insincere" attitude, it said, dismissing U.S. President George W. Bush's call on North Korea to improve its human rights record.
The North also criticized the United States for staging a joint military exercise with South Korea, warning it would "entail catastrophic consequences."
The North's powerful military said it would not sit idly by while the "exercise by bellicose forces in the U.S. and South Korea" are being conducted. "The U.S. military ignored our justifiable demand and started the joint military drills," it said.
South Korea and the United States kicked off their annual joint military drills on Monday, saying the computer-simulated war game is "purely defensive," aimed at testing command structures and communications.
About 56,000 South Korean troops and 10,000 American troops are taking part in the four-day drills, called Ulchi Freedom Guardian.
The annual joint military exercise, formerly Ulchi Focus Lens, was initiated in 1975, driven by a failed attempt in 1968 by North Korean armed agents to attack South Korea's presidential house in central Seoul.
The war game was mainly designed to bolster combat readiness of the South Korean-U.S. combined forces. The drills have been led by the commander of U.S. Forces Korea, who is also in charge of the Korea-U.S. Combined Forces Command and the United Nations Command.
But this year's game is a "certification exercise" aimed at testing Seoul's capability for an independent wartime operation, as the country is scheduled to regain wartime operational control of South Korean troops from Washington in 2012.
South Korea's Chairman of the Joint Chiefs of Staff Kim Tae-young will command the South Korean forces while Gen. Walter Sharp, Commander of the United States Forces Korea, will lead the U.S. troops.
"This year will mark the first exercise with the South Korean war-fighting headquarters in the forefront while the United States plays a supporting role," a military official said, noting that the name of the drills has been changed into Ulchi Freedom Guardian to mark the shift in the nature of the exercise.
South Korea has agreed to take back wartime operational control of South Korean troops from the U.S. military in April 2012. The country voluntarily put the operational control of its military under the U.S.-led U.N. Command shortly after the Korean War broke out in 1950.
Seoul took back peacetime operational control in 1994, but wartime operational control remains in the hands of the top U.S. commander here. Currently, the four-star U.S. commander has the authority to command both South Korean and American troops in case of an emergency.
In another major realignment of American forces in South Korea since the 1950-53 Korean War, the United States has reduced its troops in the South to 28,500 from 37,000, while redeploying the frontline U.S. ground forces to the south of Seoul.
The number was to be further downsized to 25,000 by the end of this year, triggering security jitters in South Korea, which faces lingering threats from nuclear-armed North Korea, which also boasts a 1.2-million-strong army.
In an apparent bid to ease the security jitters, Washington has recently lifted a years-long ban on exports of its high-flying Global Hawk surveillance aircraft to South Korea, according to military sources.
The U.S. military has also vowed to step up its deterrent against the North, which has developed nuclear weapons and ballistic missiles.
Lt. Gen. Joseph Fil, commander of the 8th U.S. Army in South Korea, warned Friday that if the North attacked the South, the communist nation would lose and the two Koreas would be reunified.
"There is no doubt, if the North Koreans decide to cause trouble, what the outcome will be. No doubt at all," Fil was quoted as saying by the Stars and Stripes newspaper.
Analysts here said North Korea may use the joint drills as an excuse to build up its saber-rattling and stall the U.S.-led process to disarm the communist nation of its nuclear weapons, which could dash Bush's hopes of resolving the nuclear standoff before he leaves office early next year.
"The North is likely to use the joint drills as a pretext to stall the denuclearization process, waiting for the next administration in Washington," a diplomatic source said.
The North has labeled the joint exercise as a rehearsal for invasion, calling it an "intolerable act of provocation," which would drive the Korean peninsula to "the phase of an extreme confrontation."
The Korean peninsula still remains technically in a state of war as the armed conflict ended without a peace treaty. The inter-Korean border is the world's last Cold War frontier with nearly 2 million troops on both sides.
