NORTH KOREA has apparently thrown down the gauntlet in its nuclear standoff with the United States by claiming that it was reprocessing more than 8,000 spent nuclear fuel rods that could be used to make atomic bombs.

The country’s Foreign Ministry said that the American-led war in Iraq had taught Pyongyang “it was necessary to have a powerful physical deterrent force”.

“As we have already declared, we are successfully completing the final phase to the point of the reprocessing operation for some 8,000 spent fuel rods, as we sent interim information to the US and other countries concerned early in March after resuming our nuclear activities from last December,” a ministry spokesman said American officials were baffled by the claim and suggested that North Korea’s message might have been lost in translation. It was impossible to tell from the original Korean text whether Pyongyang had already started reprocessing or was merely about to do so.

“Frankly, it’s not clear exactly what it means. There’s some imprecision in the language,” Richard Boucher, a State Department spokesman, said.He added: “We would regard processing of spent fuel to extract plutonium as an extremely serious matter.”

The ambiguous North Korean announcement came as a report in The Australian disclosed that up to 20 of North Korea's military and scientific elite, among them key nuclear specialists, had defected to the US and its allies through a smuggling operation involving the tiny Pacific island nation of Nauru. An American source confirmed to The Times last night that discussions with Nauru about helping North Korean defectors had taken place.

The defections started last October and were made possible with the help of 11 countries that agreed to provide consular protection to smuggle the targets from neighbouring China. Among those believed to be in a safe house in the West is the father of North Korea's nuclear programme, Kyong Won-ha. Debriefings of Mr Kyong are said to have given intelligence officials an unprecedented insight into North Korea's nuclear capabilities, particularly at the Reactor No 1 in the city of Yongbyon.

The current nuclear crisis erupted in October when US officials said Pyongyang had admitted to pursuing a clandestine nuclear weapons programme in violation of its international agreements.

President Bush made North Korea a member of his “axis of evil” states in his 2002 State of the Union address. Critics said his speech sent North Korea’s regime into a state of even greater paranoia.

America insisted for months that it would not hold bilateral talks with North Korea. However, a breakthrough came last week when China said it would host the talks that are now threatened.

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