Last week, while all eyes were turned to Iraq and the search the Americans have undertaken for biological and chemical weapons of mass destruction Li Gun, North Korea's deputy foreign minister, whispered to James Kelly, a U.S. assistant secretary of state, that North Korea already has a nuclear bomb. That thundering whisper, which is the first test after Iraq for the Bush administration on the issue of proliferation of weapons of mass destruction, was heard on the first day of talks in Beijing between the U.S. and North Korea.

The talks originated in the crisis that began last October when North Korea announced it was continuing to develop nuclear weapons, in violation of an agreement it signed with the U.S. in 1994. The crisis intensified early this year when Kim Zhong Il, the North Korean ruler, announced his country was pulling out of the Nuclear Non-Proliferation Treaty (NPT) and ordered the locks be removed from the doors preventing access to the 8,000 rods of nuclear fuel from which it is possible to produce plutonium.

Whether it's fraud or extortion (the CIA has been convinced for quite some time that North Korea does have two bombs) meant to win economic and political concessions from the U.S., or whether North Korea really is heading into serial production of nuclear bombs, the affair has a decisive influence on the future of nuclear proliferation in the world and especially in the Middle East.

Once again it has been made evident that when a country is determined to develop nuclear weapons, it can do so without discovery - even if it is under the watchful eyes of the best intelligence organizations in the world. That's what happened in Iraq, on the eve of the Gulf War, when International Atomic Energy Agency inspectors did not manage to find a wide-scale Iraqi nuclear development program that was only a few months away from completing a bomb.

The ramifications of the North Korean case on the Iranian case are clear. Tehran is also determined to develop a bomb, and the Iranians are also apparently succeeding in hiding some of their activity from the Western intelligence community. Six weeks ago, the Americans were surprised to discover intensive nuclear development activity they had not known anything about, at two secret installations in Natanz, where 5,000 centrifuges for uranium enrichment are being installed, and in Arak, where heavy water is apparently being produced.

North Korea's announcement about its nuclear weapons raises another cause for concern. In addition to telling Kelly about the weapons the country has, Li Gun also made clear that North Korea's decision to sell nuclear weapons now hinges on the U.S. reaction: meaning, if it is not happy about the compensation the U.S. government provides it for not selling bombs, Pyongyang will go ahead with its sales plans. Israel should be particularly worried, considering the world's most eager clients for North Korean nuclear bombs are in the Middle East.

North Korea's gamble poses a difficult challenge to the American administration. Ready to go to war to change a regime in a country suspected of possessing and developing WMD, it can't ignore the North Korean provocation. The success of the war in Iraq might lead to the conclusion the same option could be chosen in this case. But the military option is extremely dangerous because it could cause grave harm to America's ally, South Korea. The North Koreans have placed 4,000 artillery cannons in well-protected bunkers along the border with the South. They could fire half a million shells in the first hours of the war, directly at Seoul.

A large proportion of North Korea's 1.2 million-strong army, the fifth largest in the world, are deployed along the border and ready to head south in case war breaks out. North Korea has 800 warplanes, hundreds of ballistic missiles and chemical and biological weapons. It all adds up to a gloomy picture of the cost of the first day of fighting - millions could die.

Apparently therefore, at this stage at least, the U.S. will put aside the military option and try to use diplomatic and economic means to persuade North Korea to give up its ambitions for an arsenal of nuclear bombs. Increasing the chances of diplomatic pressure is the fact North Korea's neighbors - Japan, South Korea, Taiwan and China - all believe that a nuclear North Korea is a clear and present danger to regional stability and they will be showing more active involvement in solving the crisis. North Korea will find it difficult to ignore Chinese pressure, since China provides some 70 percent of North Korean oil needs, and most of the rice and vegetables needed to prevent all-out famine in the country.

In any case, the results of the North Korean crisis will to a large extent determine the policies of other countries wanting to join the nuclear club. Tehran is watching America's moves carefully. An American failure to prevent North Korea from turning into a nuclear power will encourage Iran to take the same path.