After carrying out two nuclear tests in 2006 and 2009, North Korea has completed preparations for a third such nuclear test, which could take place within two weeks, AFP reported Saturday, citing South Korean newspaper Chosun Ilbo.

Satellite images show an underground tunnel has been built at the site of North Korea's two previous nuclear tests. "Heaps of earth and sand which had been piled up outside the new tunnel have disappeared...It is highly likely that the North has installed a nuclear device inside the tunnel and sealed it (with the piles of earth and sand)," Chosun Ilbo quoted a South Korean government source as saying.

Last week, North Korea said it was ready to retaliate in the face of international condemnation over a failed rocket launch which the United States says was a disguised long-range missile test

The North also ditched an agreement to allow back inspectors from the International Atomic Energy Agency after a US decision to break off a deal struck earlier this year to provide the impoverished state with food aid.

Pyongyang called the US move a hostile act and said it was no longer bound to stick to its side of the Feb. 29 agreement, dashing any hopes that new leader Kim Jong-un would soften a foreign policy that has for years been based on the threat of an atomic arsenal to leverage concessions out of regional powers.

"We have thus become able to take necessary retaliatory measures, free from the agreement," the official KCNA news agency said, without specifying what actions it might take.

Many analysts expect that with its third test, North Korea will for the first time try a nuclear device using highly enriched uranium, something it was long suspected of developing but which it only publicly admitted to about two years ago.

"If it conducts a nuclear test, it will be uranium rather than plutonium because North Korea would want to use the test as a big global advertisement for its newer, bigger nuclear capabilities," said Baek Seung-joo of the Seoul-based Korea Institute for Defense Analysis.

Defense experts say that by successfully enriching uranium, to make bombs of the type dropped on Hiroshima nearly 70 years ago, the North would be able to significantly build it up stocks of weapons-grade nuclear material.

It would also allow it more easily to manufacture a nuclear warhead to mount on a long-range missile.

Reuters contributed to this report.

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