Impoverished North Korea (search) might resort to selling weapons-grade plutonium to terrorists for much-needed cash, and that would be "disastrous for the world," the top U.S. military commander in South Korea said Friday.

Gen. Leon J. LaPorte (search) said the communist state may have harvested plutonium from 8,000 spent nuclear rods, which experts say could yield enough material for several atomic bombs.

The North's intent was a mystery, but "from the military standpoint, they do have a capability that we must address," LaPorte said during a breakfast meeting of retired South Korean air force officers.

In early 2003, North Korea withdrew from the Nuclear Nonproliferation Treaty (search). It has since said it completed reprocessing its spent fuel rods. In September, a North Korean diplomat claimed that the country "weaponized" the nuclear fuel.

"And there is concern that North Korea, in its desire for hard currency, would sell weapons-grade plutonium to some terrorist organizations," LaPorte said. "That would be disastrous for the world."

LaPorte's comments come as nuclear talks with North Korea have broken down.

U.S. officials have already designated the isolated and impoverished North as a key proliferator of missiles, missile technology and other military hardware. And North Korea has recently threatened to strengthen its "nuclear deterrent" to counter what it calls a U.S. plot to launch a nuclear war against it.

It said it will return to nuclear talks when Washington drops a "hostile" policy toward the North. It seeks economic aid and U.S. guarantees of nonaggression in return for giving up its nuclear desire.

Since last year, the two Koreas, China, Japan, Russia and the United States have held three rounds of talks aimed at curbing North Korea's nuclear ambitions, but no breakthrough has been reported.

A fourth round slated for September failed to go ahead because North Korea refused to attend.

Some 33,000 U.S. soldiers are based in South Korea — a legacy of the 1950-53 Korean War, which ended without a peace treaty.