The United Nations nuclear watchdog has declared North Korea in breach of UN nuclear safeguards and asked the UN Security Council to consider the issue.

The move - the most severe the International Atomic Energy Agency (IAEA) can take - raises the possibility of economic or political sanctions being imposed on the North.

Pyongyang earlier said that it would consider sanctions to be tantamount to a declaration of war but has not yet reacted officially to the IAEA declaration.

I hope we will see movement in the right direction - this does not close doors to a diplomatic solution Mohamed ElBaradei, IAEA Director General

North Korean leader Kim Jong-il attended a banquet at the Russian embassy in Pyongyang, hours before Moscow abstained in the IAEA vote.

Kim, who celebrates his 61st birthday next week, received a congratulatory message from Russian President Vladimir Putin, the official KCNA news service reported.

China, the North's other key ally, supported Wednesday's decision by the 35-country IAEA board.

'Chronic non-compliance'

The Director General of the IAEA, Mohamed ElBaradei, said after the decision was announced that he would prefer a diplomatic solution.

But he said that North Korea had to make the first move after having been "in chronic non-compliance since 1993".

The United States wants the UN to intervene following Pyongyang's decision to restart its nuclear programme and its withdrawal from the nuclear non-proliferation treaty.

On Wednesday, the director of the CIA, George Tenet, said North Korea might already be capable of hitting the west coast of the United States with a nuclear missile.

Dr ElBaradei told reporters it would be a "question of months" for North Korea to reprocess spent nuclear fuel rods into components for a nuclear weapon.

I think sanctions will contribute to the opposite of what we want - which is to defuse the crisis Javier Solana, EU foreign policy chief

But the European Union and many of North Korea's neighbours, including China, Japan and South Korea, have opposed sanctions, believing that diplomacy rather than confrontation is the way forward.

Russia - a veto-holding member of the Security Council - abstained on the IAEA vote to refer North Korea to the Council.

"The Russian side believes that moving this question on to the Security Council is premature and counter-productive," the Foreign Ministry said in a statement.

EU offer

Just hours before the IAEA decision, EU's foreign policy chief said that the time was not right for imposing sanctions.

"I think sanctions will contribute to the opposite of what we want - which is to defuse the crisis," Javier Solana said, the French news agency AFP reported.

Mr Solana says the EU is prepared to send a delegation to North Korea as soon as possible in order to resolve the crisis.

CRISIS CHRONOLOGY

16 Oct: US announces that N Korea has acknowledged secret nuclear programme 14 Nov: US halts oil shipments to N Korea 22 Dec: N Korea removes monitoring devices at Yongbyon nuclear plant 31 Dec: UN nuclear inspectors forced to leave North Korea 10 Jan: N Korea pulls out of anti-nuclear treaty 28 Jan: President Bush urges the "oppressive" N Korean regime to give up its nuclear ambitions 12 Feb: IAEA refers issue to Security Council

Timeline of tensions

Under its charter, the IAEA must report any violations of the non-proliferation treaty to the Security Council.

But North Korea said before Wednesday's decision that it was not interested in whether it was referred to the Security Council by the IAEA.

A North Korean spokesman told the BBC that the IAEA meeting was not impartial, and that it reflected only the American position in the stand-off over Pyongyang's nuclear activities.

The North Korean counsellor to the IAEA, Son Mun-san, reiterated that the only way forward was for Washington to hold direct talks with Pyongyang.

'Hands tied'

Dr Gary Samore, of the International Institute for Strategic Studies, told the BBC that if the Security Council did become involved, it would be unlikely to take any action against Pyongyang in the near future.

"It has its hands completely full... dealing with Iraq for at least the next couple of weeks," he said.

South Koreans want a peaceful solution

"Even when Iraq is out of the way, there is very little agreement on the council about how to deal with North Korea," he added.

While some countries may press for sanctions, others - including China, Russia, South Korea and Japan - are afraid of North Korea's response, he said.

Meanwhile Pyongyang is still talking tough.

Senior foreign ministry official Ri Hui-chol said on Wednesday that the Communist state would retaliate "if the US infringes even one inch, on the territory, the water or the air of our country".