- U.S.-North Korea relations could soon turn hostile amid last week's escalation in tensions, according to some analysts. This might suggest the end of diplomacy between the two countries, they say.
- Pyongyang likely wants sanctions relief and a security guarantee from Washington by the year-end deadline.
- If its demands aren't met, North Korea could resume tests of longer range missiles, analysts say.
North Korean state media claimed Saturday that they had conducted a "very important" test at a rocket-testing site — the Sohae Satellite Launching Ground — that Pyongyang promised to dismantle after the first Trump-Kim summit in June 2018.
In response, U.S. President Donald Trump said on Twitter that North Korean leader Kim Jong Un risks losing "everything" if he acts in a hostile manner. He also reiterated that the reclusive country "must denuclearize as promised." To that, North Korean state media on Monday called Trump an "old man bereft of patience" and "heedless and erratic."
Trump tweet: Kim Jong Un is too smart and has far too much to lose, everything actually, if he acts in a hostile way. He signed a strong Denuclearization Agreement with me in Singapore. He does not want to void his special relationship with the President of the United States or interfere....
"This test should be a wake-up call that more activities — including possible long-range missile tests — may be around the corner," Ankit Panda, adjunct senior fellow at the U.S.-based Federation of American Scientists, told CNBC in an email, referring to the test.
Pyongyang also fired two short-range projectiles into the sea off its east coast last Thursday.
Analysts say it's still unclear whether both countries could reach a nuclear agreement by the end of December — a deadline set by North Korea.
Pyongyang could have set Washington the deadline in hopes of being offered fresh concessions to restart nuclear talks, analysts say.
But that might not be the case, they warn.
"Pyongyang, despite having placed an 'end-of-year' deadline in place in April, has basically closed the door on diplomacy with the United States entirely," Panda said.
Former U.S. State Department official Mintaro Oba, who specialized in the Koreas during the administration of Barack Obama, agreed. Both countries have repeatedly failed to demonstrate the creativity and flexibility needed for a substantive agreement, he told CNBC Monday.
"We will see a return to heightened tensions, or we'll see some smaller, face-saving arrangement that allows both sides to maintain the current diplomatic process through 2020 without any major concessions," Oba said.
Pyongyang could be looking for "substantial" sanctions relief by the year-end deadline, according to Oba. He said that will bring in more money to support the North Korean regime, which has faced a shrinking economy from punishing international sanctions.
North Korea could also demand a security guarantee as the basis of a deal, said Harry Kazianis, a Korea expert at the Washington-based Center for the National Interest.
But Trump might not be able to offer North Korea's Kim a mutually agreeable compromise by the end of the year, he told CNBC in an email, given the U.S. president's ongoing impeachment inquiry.
"If Kim thinks Trump has ... been weakened and desperate for a deal, he is about to (be) very, very disappointed," said Kazianis. Trump doesn't want to lose Republican support in the U.S. Senate and can offer no concessions whatsoever until late January 2020, he pointed out.
And if Pyongyang doesn't get the sanctions relief or security guarantee it wants, "North Korea is now destined to test an ICBM (intercontinental ballistic missile) on Christmas Day," Kazianis said.
Another expert said there could be another way out.
While it's still possible that North Korea could test longer range missiles if it doesn't get an agreement by end-December, they could turn to other countries as well, said Shawn Ho, an associate research fellow at Singapore's S. Rajaratnam School of International Studies.
"So far, the North Korean approach has been really to focus on their bilateral negotiations with America to try to solve this issue. But maybe the North Koreans have a plan B in China and Russia," he said.