SEOUL -- North Korea is digging tunnels at a site where it has launched two nuclear tests, suggesting it is preparing a third, the South's Yonhap news agency said on Sunday, a development which would trigger concern across the region.
Tensions rose on the divided peninsula when 46 sailors were killed in an attack in March on a South Korean naval vessel. North Korea, which has denied responsibility, shelled the southern island of Yeonpyeong in November, killing four people and sparking fears of possible all-out war.
The North was excavating several tunnels before picking the most suitable, Yonhap said, citing an unnamed South Korean government source.
"South Korean and U.S. intelligence authorities have spotted North Korea building several other underground mines at Punggye-ri where it had run two nuclear tests," the unidentified source was quoted as saying.
"It is judged to be clear evidence of preparing for a third nuclear test."
Military talks broke down between the two sides this month, dealing a setback to the resumption of six-party aid-for-disarmament negotiations, which North Korea walked out of over two years ago.
While the two sides are not talking, the risk of what both sides calls a "provocation" increases. Analysts have said acts of brinkmanship by the North could include military drills or attack, or the testing of a missile or nuclear device.
North Korea has said it wants to return to the broader negotiations, but Seoul and Washington have questioned its sincerity about denuclearising -- pointing to its revelations in November about a uranium-enrichment programme.
Pyongyang says the programme is for peaceful energy-producing purposes, but regional powers, including sole major ally China, have expressed concerns about the facility which opens a second route to make a nuclear bomb after its plutonium programme.
The North was likely to conduct a plutonium-fuelled test, mindful of opposition from China to the uranium enrichment, the source told Yonhap.
In December, an institute of South Korea's foreign ministry said the North could carry out a third nuclear test in 2011 to strengthen the credentials of its young leader-in-waiting, Kim Jong-un.
Satellite images also showed North Korea had likely completed a second long-range missile launchpad, an expert told Reuters last week.