European and Asian leaders on Sunday urged North Korea to refrain from doing anything to aggravate tensions over its nuclear program as they called for the isolated state to start democratic reforms.

"We all agree that the democratization of the Korean peninsula is essential in maintaining peace and stability in North East Asia," Finnish Prime Minister Matti Vanhanen said after leading talks at the EU-Asia summit in Helsinki.

"We urge North Korea to refrain from any action that might further aggravate the situation," he said, adding that leaders also want North Korea to deal with humanitarian issues.

FOX News CountryWatch: North Korea

The 38 nations at the summit support the peaceful resolution of the North Korean nuclear issue through dialogue, he said, and also back the six-party talks between China, the U.S., South Korea, Japan and Russia that aim to persuade North Korea to abandon its nuclear ambitions. The talks were suspended in November.

A British newspaper reported Sunday that Russian diplomats believe it is now highly probable that North Korea will carry out its first underground test of an atomic device. The Sunday Telegraph said North Korean leader Kim Jong Il had made his intentions clear during recent talks with Russian and Chinese officials in Pyongyang.

The Russians concluded that he was serious about showing that his scientists have successfully built a nuclear weapon, the newspaper said.

"Their fears appear to bolster American suspicions that a test is being prepared, after intelligence reports last month of unusual vehicle movements in the area believed to be the test site," the Sunday Telegraph reported.

The newspaper said Russia and China, who are North Korea's closest friends, have warned Kim that detonating an atomic device would alienate them.

The newspaper did not make clear where it acquired its information, but quoted an unidentified Russian diplomat as saying it was highly probably that "if North Korea conducts an underground nuclear test, it will face severe punishment. It would pose a very serious threat to world peace."

The United States has said that a North Korean nuclear test would be "a deeply provocative act."

Kim is reported to be irritated by financial sanctions imposed last year by the United States, including the blocking of bank accounts abroad believed to have been used for money laundering and illegal arms deals.