The United States and Japan agreed Monday to take "decisive action" against North Korea at the United Nations Security Council following the communist state's announcement it had conducted a nuclear test.

US President George W Bush and Japanese Prime Minister Shinzo Abe reached the agreement in a 15-minute telephone conversation, the Japanese embassy in Seoul said in a press release.

Abe, who took office last month, arrived here from Beijing on the last leg of a two-day tour aimed at mending strained relations with his two Asian neighbours.

Bush and Abe viewed Pyongyang's announcement as "categorically unacceptable", a "grave threat to peace and stability in the international community", and a "serious challenge to the (nuclear)

non-proliferation regime," the statement said.

The two leaders also agreed that the "US deterrence based on the Japan-US alliance is unshakeable," it added.

The spectre of an Asian atomic arms race loomed over the region yesterday after communist North Korea shocked its neighbours by announcing it conducted its first-ever nuclear test.

Raising the nuclear stakes from Pyongyang to Tokyo would put some of the world's biggest cities in the shadow of atomic weapons. It might also put nuclear arms in the hands of previously reluctant powers like South Korea or Taiwan.

On a wider scale, North Korea's dabbling with atomic weapons could spur other nuclear powers, including the United States, India or China, to resume their own nuclear testing, a move that raises the risk of prolifera-

tion.

"If the test was true, it will severely endanger not only Northeast Asia but also the world stability," Japanese Foreign Minister Taro Aso said.

Officials from Washington to Seoul had warned of an arms race even before North Korea said it fulfilled its threat to join the elite club of nuclear powers.

South Korea fears Japan would be the first to go nuclear, triggering countermoves by suspicious Asian neighbours in a cascade that upends regional security.

"There's no equalizer like the bomb," said Peter Beck, head of the Seoul office of the International Crisis Group think tank. "It's safe to say it will lead to an arms race will push all the governments in the region to increase defence spending."

Defence Secretary Donald H Rumsfeld warned Thursday that allowing North Korea to test a bomb

would provoke far-reaching fallout.

"The lack of cohesion and the inability to marshal sufficient leverage to prevent North Korea from proceeding toward a nuclear programme ... it will kind of lower the threshold, and other countries will step forward with it," Rumsfeld said.

The current North Korean nuclear standoff dates to 2002, when the United States accused North Korea of conducting a secret nuclear programme in violation of a 1994 agreement.

North Korea announced Monday it had safely conducted an underground test, claiming the development "will contribute to defending the peace and stability on the Korean Peninsula and in the area around it.”