The state-funded Korea Institute for National Unification on Wednesday claimed North Korea's "total offensive phase" came to an end with the firing of seven medium- and short-range missiles on July 4. "Now the counterattack phase by the U.S. and other countries has begun," it said.

Although both Washington and Pyongyang are talking about dialogue, "North Korea currently cannot accept U.S. demands for irreversible denuclearization and the U.S. refuses to acknowledge the North's possession of nuclear weapons," KINU said. "While the phase of confrontation continues, there is now a tiny chance of significant dialogue or negotiations."

Park Hyung-jung, a senior fellow at the institute, cited North Korean leader Kim Jong-il's ill health as the reason why the North launched the all-out offensives since last October. At the risk of short-term isolation, the North needed vigorous offensives to prevent unrest at home and abroad and ensure a stable succession of power.

The strategy produced some results. A "150-day struggle" to mobilize all workers for farm work bolstered internal controls while undermining the nascent market economy. Provocations including the second nuclear test also put bilateral talks between Washington and Pyongyang on the agenda to replace the six-party denuclearization talks.

But KINU chief Suh Jae-jean said North Korea "was put on the defensive by UN Security Council Resolution 1874 after the latest nuclear test." U.S. tracking of North Korean ships and financial sanctions in the wake of the resolution caused the North some pain.

The U.S. has repeatedly said it will not reward North Korea just for returning to the dialogue table, but the uncertainties of the transition period make it difficult for the North to abandon its nuclear weapons and programs, as the U.S. is demanding.

"The North will face a tougher crisis if it tries to hold onto its nuclear weapons in the attempt to justify the succession," KINU warned.