North Korea (searchcelebrated its 55th anniversary as a communist state on Tuesday with patriotic songs and a military parade lacking a display of heavy armaments, easing tensions over its threats to conduct a nuclear test.

About 10,000 troops and civilians marched through the capital, Pyongyang (search), watched by hundreds of thousands of spectators including the country's leader Kim Jong Il (search) and foreign dignitaries.

The troops carried only small arms, including machine guns and rocket-propelled grenades, despite recent reports in South Korean newspapers that up to 20,000 troops, 150 tanks and some of North Korea's much vaunted missiles systems, including a new long-range ballistic missile, would be on display.

No heavy arms or other military hardware were on display during the two-hour parade, said a Western observer, speaking on condition he was not identified further.

"There were no missiles, tanks or other military hardware. It was all men, women and bands. Apparently there has been no hardware (in parades) for several years," said the Western observer, who was contacted by telephone.

Video footage showed goose-stepping soldiers followed by civilians waving the national flag and carrying banners and portraits of Kim and his father, former President Kim Il Sung who died in 1994.

The troops formed figures around the bands on Pyongyang's Kim Il Sung Square before marching out. Men, women and children, many in traditional costumes, waved red paper flowers and formed the image of the North Korean flag with colored placards.

The Soviet-backed Democratic People's Republic of Korea was founded on Sept. 9, 1948, during the Cold War when the Korean peninsula was divided into communist and capitalist camps after the end of Japanese colonial rule. In the last five decades, North Korea has become one of the most reclusive communist states and its 1.1 million-strong military is the world's fifth largest.

The military parade was being closely watched for signs of belligerence after Kim Yong Il, the North Korean delegate at last month's multilateral talks in Beijing, warned after the meeting that his country could test a nuclear weapon and even prove that it had the means to deliver nuclear bombs.

Washington had expressed fears that the test could happen Tuesday or that the regime could formally declare itself a nuclear power. North Korea's covert program is believed to have produced at least one nuclear bomb.

The crisis over North Korea's suspected nuclear weapons program erupted nearly a year ago when Washington said Pyongyang had acknowledged running a secret nuclear program in violation of international agreements. The two sides held talks to resolve the crisis last month in Beijing along with South Korea, Japan, China and Russia.

North Korea described the talks as useless, but the position is being seen as a way to improve its negotiating position in the next round of talks.

In a speech at the parade Tuesday, the North Korean military's chief of the general staff, Kim Yong Chun, again talked about nuclear deterrence.

"The DPRK will continue to increase its nuclear deterrent force as a means for just self-defense in order to defend the sovereignty of the country as the United States has not yet shown its will to drop its hostile policy toward the DPRK despite the DPRK's good faith and magnanimity," Kim was quoted as saying by the official KCNA news agency.

But the statements are also seen as bluster and brinkmanship to improve its negotiating position.

"North Korea's statements ... seem to be part of its tactics to gain leverage at the coming talks, and it seems to be working since there is a clear softening of stance from the United States," Koh Yu-hwan, a North Korea expert in Seoul, told The Associated Press.

North Korea wants Washington to sign a nonaggression treaty, open diplomatic ties and provide economic aid. The United States has demanded that North Korea dismantle its nuclear program first before any concessions are offered. But last Thursday, a senior U.S. State Department official indicated that the administration might be a little more flexible.