SEOUL (Reuters) - U.S. Secretary of State Hillary Clinton on Friday told North Korea to stop being provocative and return to nuclear talks, warning ties could not improve with Washington if it continued insulting South Korea.

Secretary of State Hillary Clinton walks to sign the guest book during her visit to Yongsan Garrison in Seoul February 20, 2009. REUTERS/Jo Yong-Hak

Clinton, calling the isolated state a “tyranny,” repeated the new U.S. administration’s offer of diplomatic relations, massive aid and a peace treaty if Pyongyang gives up efforts to build an atomic arsenal, which poses one of the biggest risks to security in North Asia and its giant economies.

“The most immediate issue is to continue the disablement of their nuclear facilities and to get a complete and verifiable agreement as to the end of their nuclear program,” she told a news conference with South Korean Foreign Minister Yu Myung-hwan.

Talks between the two Koreas, China, Japan, Russia and the United States on the North’s nuclear ambitions have all but ground to a halt, most recently stuck on Pyongyang’s refusal to allow nuclear material to be taken abroad for tests.

Clinton made clear the North also needed to tone down its increasingly furious rhetoric, which this week alone has included a threat of war with its wealthy neighbor South Korea and an accusation the United States plans a nuclear strike against it.

North Korea is also thought to be preparing the launch of a missile with the potential to reach U.S. territory.

“North Korea is not going to get a different relationship with the United States while insulting and refusing dialogue with (South Korea),” Clinton said in Seoul, the third stop of her Asia tour.

She called the saber-rattling “provocative” and “unhelpful,” praising the South Korean government for its restraint.

North Korea, seen facing another serious food shortage, has turned on the conservative government in the South which has ended years of free-flowing aid over the nuclear impasse.

“(South) Korea’s achievement of democracy and prosperity stands in stark contrast to the tyranny and poverty across the border to the North,” Clinton said.

North Korea bristled at being described as “an outpost of tyranny” by the Bush administration, and one analyst said Clinton’s comments could trigger more anger from Pyongyang which may have hoped for a softer line from the new U.S. government.

“(This) is likely to lead it to a new round of harsher rhetoric or to a possible military provocation against South Korea,” said Moon Hong-sik, a research fellow at the South’s Institute for National Security Strategy.

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POSSIBLE POWER STRUGGLE

On Thursday, Clinton warned of a possible power struggle in the communist state, and the possibility of a crisis over who may succeed leader Kim Jong-il, 67, who is widely believed to have suffered a stroke last August.

“I don’t think that it’s a forbidden subject to talk about succession in the hermit kingdom,” she told reporters on Friday. “You deal with Kim Jong-il now and for as long as he is the man who is calling the shots.”

Asked if Kim was still calling the shots, she said: “I have no idea ... we have to assume he is because that’s who we deal with.”

While she was in Seoul, North Korea said a senior general and close Kim aide, O Kuk-ryol, had been promoted to a top post in the National Defence Commission, the main seat of power.

It is one of a number of recent changes in the military hierarchy and comes amid widespread speculation that Kim may be making preparations for his succession.

He is thought to have largely recovered from his illness, but is said to have other chronic health problems.

Speculation has focused on one of his sons or his brother-in-law being groomed to take over Asia’s only communist dynasty.

On Friday, Clinton said Washington was dealing with the government in power and asked it to fulfill its nuclear agreement.

“The Obama administration will be willing to normalize bilateral relations, replace the peninsula’s longstanding armistice agreement with a peace treaty and assist in meeting the energy and other economic and humanitarian needs of the Korean people,” she said later at a women’s university.

Clinton also announced her choice of Stephen Bosworth, a former U.S. ambassador to South Korea, to be special representative for North Korea and the nuclear talks.

She met also South Korean and U.S. military leaders, whose troops face the North’s 1.2-million-strong army -- most of it positioned near the heavily fortified border that has divided the peninsula for about 60 years. There are about 28,000 U.S. troops to support the South’s 670,000 soldiers.

Clinton later flies to China, the nearest North Korea has to a powerful ally.