Visitors look at replicas of North and South Korean missiles at the Korea War Memorial

North Korea might stage a second atomic test to raise the stakes in nuclear disarmament negotiations next year but the new US administration is unlikely to yield, a South Korean think-tank said Monday.

It warned it could not rule out the possibility the North may threaten to suspend denuclearisation, boycott six-party disarmament talks and fire missiles or even a nuclear weapon "to tame the new Obama administration or increase its leverage in the nuclear negotiations."

"North Korea may become less reasonable in the face of growing challenges from instability of its regime and rumours of leader Kim Jong-Il 's ill health," said the report from the Institute of Foreign Affairs and National Security, which is under the foreign ministry.

But incoming President Barack Obama, it forecast, would be tougher than his predecessor in dealing with what it called Pyongyang's brinkmanship.

The communist state staged its first nuclear test in October 2006 while the six-party negotiations were at a stalemate.

The latest round of talks this month ended without agreement on the next step -- procedures to verify the North's declaration of nuclear activities.

The institute noted that Obama has expressed willingness in principle to talk to leaders of hostile nations, such as the North's Kim.

But it said his engagement policy, given no results, may also switch to a tougher stance.

"Particularly on the verification issue, the Obama administration is likely to adopt a tougher stance than the Bush administration, which implies the Pyongyang-Washington relations won't be very smooth," Yonhap news agency quoted the report as saying.

North Korea in any case would not be a diplomatic priority for Obama given the economic crisis, the Iraq war and Iran's nuclear drive among other issues, it went on.

Should the nuclear stalemate continue, North Korea could soften its current hostility and turn to South Korea as its last source of assistance.

The institute said the global economic crisis would weigh heavily on the North as mineral export prices fall and outside aid decreases, and Pyongyang may face another food shortage crisis similar to the 1990s.

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