N. Korea tries to jolt Obama

North Korea said yesterday it was scrapping all accords with South Korea, a move the South's prime minister said could be timed to coincide with Barack Obama taking over as US president.

The US State Department described the North Korean comments as "distinctly not helpful" but said Washington would keep pursuing a 2005 multilateral deal under which Pyongyang agreed to abandon its nuclear programmes.

Analysts said the latest rise in tension increased the chances of a mili-tary clash on the strongly defended border that has divided the two Koreas for more than half a century.

"There is neither way to improve (relations) nor hope to bring them on track," North Korea's KCNA news agency quoted the Committee for the Peaceful Reunification of Korea as saying.

"The confrontation between the north and the south in the political and military fields has been put to such extremes that the inter-Korean relations have reached the brink of a war."

KCNA also criticised South Korean President Lee Myung-bak over the appointment of a new minister in charge of relations on the peninsula, saying he was an architect of the government's "undisguised policy for confrontation with the DPRK (North Korea)."

The North in recent months has repeatedly warned of war and threatened to destroy the conservative government in Seoul that has ended a decade of free-flowing aid to Pyongyang after taking office a year ago.

South Korea's presidential Blue House stuck to its policy of largely ignoring the rhetoric flying across one of the world's most heavily armed borders, where more than one million troops face off.

"Our position is there is no need to react sensitively or get happy or sad over every single statement issued with some political motive (by the North)," a presidential official said.

The cancelled agreements do not include the armistice at the end of the 1950-53 Korean War, signed by the United States, North Korea and China, but not the South. Technically, the war is not over because there is still no peace accord.

Speaking on the sidelines of the World Economic Forum in the Swiss resort of Davos, South Korean Prime Minister Han Seung-soo said he hoped the North would embrace dialogue.

"We hope that instead of threats of this kind, North Korea would come out to talk to us on matters of mutual concern and interest," he said.

Asked whether the timing was tied to Mr Obama's presidency, he said: "I don't know what is behind their thinking, but I am sure that the inauguration of the Obama administration must have had some impact on the thinking of North Korea on global issues, as well as the issue of the Korean peninsula."

US State Department spokesman Robert Wood said the Obama administration was still reviewing its policy toward Pyongyang but saw value in the six-party talks that produced the 2005 denuclearization deal.

"North Korea is a priority for us," he told reporters.

Reaction in financial markets was sanguine.

"Market participants are sick and tired of the North's rah rah," said Y.S. Rhoo, an analyst at Hyundai Securities. "Investors remain pretty much unmoved now."