SEOUL, SOUTH KOREA - North Korea's parliament meets for a rare second annual session on Monday amid growing momentum in the international community to punish Pyongyang for the sinking of a South Korean navy ship in March that killed 46 sailors.
Analysts said the North could use the extra session of the Supreme People's Assembly to make a major announcement on personnel changes or power succession, or to issue a hardline response to sanctions imposed by the South over the ship sinking.
North Korea drove tensions to new heights in recent weeks by threatening war if Seoul imposed sanctions, denying any role in the sinking of the corvette Cheonan and accusing South Korean President Lee Myung-bak of using the incident for political aims.
The mounting antagonism between the two Koreas, which so far has remained rhetorical, has unnerved global investors, worried about armed conflict breaking out in a region home to the world's second and third biggest economies.
Many analysts say neither side is ready to go to war but also see the possibility of more skirmishes at their disputed sea border off the west coast or along the heavily armed DMZ land buffer that could flare up into a major fight.
South Korea last week took the dispute to the U.N. Security Council, demanding its unruly neighbour admit to the sinking. The Security Council last year imposed sanctions in response to the North's nuclear test, cutting off most of its lucrative arms trade.
The South Korean and U.S. militaries are expected to stage a joint exercise later this month, postponed from this week, to test readiness for the North's aggression.
The South's Defence Ministry declined to confirm a local media report that said the delay was to avoid irritating China, the North's key ally and a Security Council permanent member, and win its crucial vote there to censure Pyongyang.
Some analysts said the parliamentary session could also mark the 10th anniversary of a summit between the two Koreas by formally overturning pledges of reconciliation made then.
North Korea has called Seoul's move to refer it to the Security Council an 'unforgivable act of grave provocation.'
The Supreme People's Assembly is the North's rubber stamp parliament, and approves new laws, personnel changes and economic policy initiatives as a formality after they have been formulated by the leadership.
The focus of power is the National Defence Commission headed by the country's supreme leader Kim Jong-il and staffed by some of his closest confidants.
The carefully choreographed sessions do not typically touch on the North's atomic ambitions or its negotiations with the outside world on reducing the threat it poses to the region in return for aid and better global standing.