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There is no doubt that they have nuclear capability.
Source 5
However, from what I understand, the US government has basically guaranteed nuclear defense to the S.Korean government should it become necessary. The S.Korean government accepted the deal because it allowed them to funnel more money into the Korean economy instead of defense. The same goes for the military still present in S.Korea from the US.
I honestly don't believe that S.Korea has built a nuke, but I am sure that we (the US Government) has made sure that we will supply the nuclear weapons if required.
International Level: International Guru / Political Participation: 863 86.3%
A nuclear war in that region makes no sense at all, it does not make sense period but considering the close proximity of surround nations and those in the conflict that is just a negative - there can be no winners, just lives lost and countries where bombs fell that cannot be inhabited for years.
On another note, the South Korean war exercises have already started.
International Level: International Guru / Political Participation: 3241 100%
The exercises are now complete and N.Korea hasnt done anthing yet but issue a statement that reversed the previous statement of lighting up the entire region with nukes if the exercises took place. Expect some tit for tat in the next few weeks - N.Korea has to do something just to let them know they are there and still need food and aid, since none has been shipped out. Look for them to desire to restart the multi-country talks. However, this is a pretty obvious sign that China wont back them regardless or they would have done something. China really isn't happy with this as they are to meet with the US very soon and don't want this to derail their talks (China wants to talk about the US and their economy and have no desire to dedicate the entire trip to talking about N.Korea).
International Level: International Guru / Political Participation: 863 86.3%
Military reporter's notebook: In Korea, a bright line still divides
The demilitarized zone has a tram ride for tourists. Pensioners and schoolgirls come to see South Korea's side of the fortified line, created by the armistice that halted the Korean War in 1953. Ref. Source 5
N. Korea threatens military action against 'southern puppets':
Pyongyang has warned of 'physical countermeasures' against South Korea if they participate in the UN sanctions against the North. Tensions are simmering on the peninsula after North Korea announced a third military test 'targeting' the US. Ref. Source 1
South Korea confirms North Korea carried out nuclear test, says S. Korean national security adviser Chun Young-woo. Ref. USAToday
North Korea army has declared invalid the armistice agreement that ended the Korean War in 1953, an official North Korean newspaper reports.
The move comes after a new joint military exercise between South Korea and the United States began.
More than 3,000 U.S. Forces are taking part in Key Resolve, according to United States Forces Korea.
North Korea has called the annual training exercises "An open declaration of a war," but South Korea says it notified Pyongyang that the drills "Are defensive in nature." Ref. CNN