SEOUL - North Korea said Thursday it was immediately reactivating a nuclear power plant at the center of a suspected 1990s weapons program, raising the stakes in a stand-off at the world's last Cold War flashpoint.

North Korea's decision to restart the reactor mothballed in 1994 after an international crisis over alleged production of weapons-grade plutonium there escalates a two-month-long showdown with the United States over a second nuclear program being pursued by the isolated and impoverished communist state.

Analysts said Pyongyang's latest move -- which it said it had been forced to take after a U.S.-led decision to suspend oil aid to the country -- appeared to be a last-ditch attempt to force arch-enemy Washington to the negotiating table.

The announcement came exactly a week before South Korea's presidential election, a contest which will turn in part on the question of whether to embrace or sanction North Korea.

The reactor at Yongbyon, north of Pyongyang, was frozen in 1994 after a year-long crisis ended with the Agreed Framework pact between the United States and North Korea. The director of the Central Intelligence Agency said that year that the CIA estimated North Korea had produced one or two nuclear weapons.

Under the pact, Pyongyang promised to scrap plans to develop such weapons in return for provision of light water nuclear reactors and fuel oil supplies.

In October this year, Washington said Pyongyang had admitted embarking on a new secret program, this time to enrich uranium for weapons, in violation of the Agreed Framework.

Following that admission, Washington and its allies, including South Korea and Japan, decided to suspend fuel oil shipments to North Korea from December -- just as winter brought sub-zero temperatures to the destitute Northeast Asian country.

RAISING THE STAKES

After weeks demanding that Washington sign a non-aggression treaty to defuse the row, North Korea's Foreign Ministry raised the stakes Thursday.

It said in a statement: "The prevailing situation compelled the DPRK government to lift its measure for nuclear freeze taken on the premise that 500,000 tons of heavy oil would be annually supplied to the DPRK under the DPRK-U.S. Agreed Framework and immediately resume the operation and construction of its nuclear facilities to generate electricity.

"Whether the DPRK refreezes its nuclear facilities or not hinges upon the U.S.," said the statement, carried by the official Korean Central News Agency (KCNA).

DPRK is the acronym for the communist North's official title, the Democratic People's Republic of Korea.

A follow-up statement on KCNA added: "It is the invariable stand of the DPRK government to find a peaceful solution to the nuclear issue on the Korean peninsula."

South Korea convened a special National Security Council meeting, and issued a statement expressing "strong regret and serious concern" at the statement, which Seoul said would raise tensions on the divided peninsula.

"The government will be closely monitoring North Korea's actions, while strengthening Korea-U.S.-Japan cooperation and coordination with other concerned countries," Seoul added.

The two main presidential candidates in South Korea's December 19 election called on Pyongyang to reverse its decision.

Working-level officials from the two Koreas were holding economic talks in Seoul Thursday which went on despite the announcement, local media said.

JAPAN URGES CALM

Japan called for a calm response to North Korea's statement, saying Pyongyang appeared to be seeking a peaceful end to the spreading row over its nuclear program.

"If you read the North Korean announcement carefully, their consistent stance is to seek a peaceful resolution," Prime Minister Junichiro Koizumi told reporters.

"We need to respond calmly, based on close cooperation with the United States and South Korea."

Early this year President Bush accused North Korea, Iraq and Iran of forming an "axis of evil" making weapons of mass destruction that could be obtained by terrorist groups.

North Korea's latest statement repeated Pyongyang's assertion that it was Washington which had broken the Agreed Framework.

"The U.S. cannot escape its responsibility for utterly trampling on the terms and spirit of the Agreed Framework by designating us as an "axis of evil" and target of pre-emptive nuclear attacks," the statement said.

Suh Dae-sook, an expert on North Korea at the University of Hawaii, said he saw Pyongyang's move as a bid for long-sought talks with Washington, which has so far ruled out dialogue until the North abandons its uranium enrichment program.

"I guess they are ready to negotiate. This is the only weapon they have or alternative they have," he told Reuters.

"I think North Korea are raising their stakes... they are raising their position so that they can negotiate and have a better cause for negotiation," Suh said.

(Additional reporting by Samuel Len in Seoul and Jane Macartney in Singapore)