World powers condemned North Korea yesterday after it said it conducted an underground nuclear test and the UN Security Council prepared a stern response that could further impoverish and isolate the communist state.

China, Pyongyang's strongest political and economic backer, denounced the test by its neighbour as "brazen," and urged it to avoid action that could worsen the situation.

Russian President Vladimir Putin also condemned the test. US President George W. Bush called it a "provocative act" that threatened international peace and security and required an immediate response from the UN Security Council.

Yesterday's announcement by Pyongyang sharply escalated world concerns over North Korea's nuclear programme and was a slap in the face for major regional and world powers engaged in six-party talks intended to prevent just such a test.

It delivered a sharp blow to Chinese President Hu Jintao's doctrine of using economic incentives and diplomatic coaxing to avert North Korea's drive to become a nuclear weapons state. Only seven states have acknowledged having nuclear weapons.

The Security Council was preparing a swift response to the test, with the US called for a range of sanctions including international inspection of cargo going in and out of North Korea to check for weapons of mass destruction and related materials, diplomats said. Other proposals included a total arms embargo and a freeze on assets associated with Pyongyang's weapons of mass destruction.

Britain and France said they would support sanctions. "The discussion will be on sanctions," France's UN Ambassador Jean-Marc de la Sabliere said on his way into a Council session. "The time has come to have a Chapter 7 resolution."

Chapter 7 makes a resolution mandatory for all UN members and allows for sanctions and even war. But the Security Council has to state specifically what kind of action members want. Israel worried that Iran, already the focus of multinational efforts to curtail its nuclear programme, might be emboldened to follow North Korea's lead.

"Now that North Korea has proven nuclear capabilities, it is liable to collaborate with Iran and accelerate the Iranian nuclear programme," Israel's ambassador to the US Danny Ayalon told Israeli army radio.

North Korea's announcement pushed the dollar to an eight-month high against the yen and helped shove oil above $60 a barrel. South Korea's won fell to two-month lows, but US investors were unnerved and pushed stocks slightly higher.

President Bush said North Korea had been a leading proliferator of missile technology, including transfers to Iran and Syria, and warned Pyongyang against such a transfer of nuclear weapons.

"The transfer of nuclear weapons or material by North Korea to states or non-state entities would be considered a grave threat to the United States and we would hold North Korea fully accountable for consequences of such action," he said. Mr Bush said he spoke by phone to leaders of China, South Korea, Japan and Russia - the other parties involved in long-stalled negotiations with North Korea - and all agreed that the test was unacceptable.

While stressing his commitment to diplomacy, Bush said he had told South Korea and Japan that "the US will meet the full range of our deterrent and security commitments" in the Asia-Pacific region. North Korea's action presented Bush and fellow Republicans a further foreign policy challenge four weeks ahead of US elections where control of the US Congress is at stake. Pyongyang's official Korean Central News Agency (KCNA) said there was no leak or danger from its test.

"It marks a historic event as it greatly encouraged and pleased the KPA (Korean People's Army) and people that have wished to have powerful self-reliant defence capability."

The US Geological Survey said it had detected a 4.2 magnitude tremor in North Korea at 10.35 a.m. local time (0135GMT). The Japan Meteorological Agency said its data showed a tremor took place around Gilju, on the peninsula's northeast coast around 110 km from the Chinese border.

There was no consensus on the size of the North Korean blast.

A US official said it could take several days for intelligence analysts to determine whether the event was the result of an unsuccessful nuclear test, a small nuclear device or a non-nuclear explosion.

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