Tensions are flaring on the Korean Peninsula, but New Mexico Gov. Bill Richardson warned Thursday that anything other than careful diplomacy could worsen the "tinderbox" situation.

Richardson, a former U.S. ambassador to the United Nations, returned this week from serving as an unofficial envoy to the rogue North Korean regime. The visit came as the South Koreans began four days of live-fire military exercises less than 20 miles from the border between nations.

Military officials in Pyongyang called the South "puppet war mongers" and threatened a nuclear holy war.

"[The North Koreans] have to improve their behavior first before we start negotiations," Richardson told Fox News Thursday. "But I believe they've improved, and if that's the case let's... reconvene to cool things down on a peninsula that is just a big tinderbox right now."

"Any miscalculation is going to be very, very costly," he continued. "You don't want that Korean Peninsula exploding. There's just too many reasons for it not to happen."

But one expert says the time for negotiation has long passed, and that the Obama administration doesn't share Richardson's confidence in diplomacy.

"We've been down that road before. It doesn't work, and that's why even White House officials right now are very skeptical of what Richardson did," said Prof. Gordon Chang, Director of Stanford University's Asian American Studies Program and a long-time expert on the Korean Peninsula.

Richardson, who has made several trips to the peninsula, said that North Korea's saber-rattling is all too typical. "My hope is that they don't react militarily this time," he said. "This is part of their being, the way they gin up and try to dramatize everything with those very negative, inflammatory words. It's typical of them."

But Richardson, whose term as New Mexico governor ends in eight days, added that he's not an official envoy. "I went on this trip as a private citizen. I was not representing the administration," he said. "I know how these guys act and I think my trip helped calm things down a little bit."