On New Year's day, North Korean leader Kim Jong-un delivered an address full of mixed messages. He issued nuclear threats but also offered to engage in a dialogue with South Korea, restore a hotline between the two capitals, and schedule talks at the demilitarised zone in Panmunjom. He even suggested that North Korean nationals participate in the Pyeongchang Winter Olympics.

It is difficult to say what pushed the North Korean leader to relax his otherwise belligerent rhetoric. There is little intelligence available on the inner workings of his regime and these days even high-ranking visitors from China, North Korea's main ally, are denied the courtesy of an audience with Kim Jong-un.

Nevertheless, it seems that Washington's carrot and stick strategy might have worked. Although most of the world's attention has been focused on US President Donald Trump's provocative tweets on North Korea, his administration has been quite busy working on the issue on various fronts.

Talks and military pressure

During a June 2017 meeting with then newly elected President Moon Jae-in, President Trump stated that the era of strategic patience is over, which clearly informed Kim Jong-un and other stakeholders that the failed polices of past US administrations would not be repeated.

Subsequently, the Trump administration led international efforts to increase pressure on North Korea. This includes United Nations Security Council sanctions resolutions in August, September, and December of 2017- a significant achievement given the tensions between the US and Russia on Ukraine and Syria, and between the US and China on a wide range of security and trade issues. Meanwhile, Washington put North Korea on the list of state sponsors of "terrorism".

At the August ASEAN Regional Forum, the Trump administration also urged the ten-nation bloc not to serve as a safe place for North Korean business and diplomats to conduct illicit activities.

At the same time, US Secretary of State Rex Tillerson on a number of occasions reiterated Washington's readiness to sit down for talks with Pyongyang. In December, he even declared that the US was willing to talk to North Korea without any "precondition".

The US has kept up military drills in the vicinity of the Korean Peninsula, including, Key Resolve, Foal Eagle, and the Ulchi Freedom Guardian exercises in the spring and summer. In December, the Vigilant Ace 18 exercise brought into South Korea the largest concentration of fifth-generation fighter jets.

With military exercises an important part of a comprehensive strategy, the Trump administration is unlikely to accommodate calls to pause military exercises in return for a North Korea pause in nuclear and missile tests. However, Washington conceded to postpone military drills until after the Winter Olympic Games in South Korea.

South Korea's weak institutions

Often overlooked as a motivation for North Korea accelerating its nuclear and ballistic missile programmes in recent years is the institutional instability (despite its economic strength) of South Korea. In recent years, Seoul has been shaken by the arrest of a member of the National Assembly accused of operating a North-Korea-sponsored plot to overthrow the government; days-long filibusters; corruption investigations of politicians and business leaders; the impeachment of President Park Geun-hye; and an early presidential election.

When President Moon took office in May 2017, he faced a number of challenges, including North Korea's increasing nuclear and ballistic tests, a US president with an aggressive approach to security and trade issues, and preparations for the February 2018 Pyeongchang Winter Olympics.

President Moon's left-of-centre predecessors were manipulated by Kim Jong-un's father Kim Jong-il into providing cash, food aid, and investments. He will have to pursue a firmer position if he is to stand up to Pyongyang's aggressive posturing.

President Moon and his compatriots want to show the world that despite North Korea's threats, South Korea remains capable of hosting the Winter Olympics. Seoul was already the victim of an unsuccessful North Korean plot to disrupt the 1988 Seoul Summer Olympics. In 1987 two North Korean agents put a bomb on a Seoul-bound aeroplane killing 115 people on board; the explosion was meant to wreck the Seoul airport, but the device exploded early.

Today, South Korea certainly would welcome the North's participation as a competitor rather than have the North excluded as an enemy. However, this week's meetings with North Korea and its participation in the Olympics will test President Moon's wisdom and policies; he should avoid giving Kim Jong-un the military and public relations victories that he seeks.

China and Japan

Frequently criticised by President Trump for its failure to enforce sanctions, China now claims it will enhance UN sanctions enforcement, with a recent pledge to deal seriously with violations.

China must balance its resentment of US sanctions on Chinese businesspeople who transact with North Korea, anger at South Korea's deployment of the Terminal High Altitude Defense system, and fears of a North Korea regime collapse with the more important goal of a nuclear-free Korean Peninsula. While it appears that China played no role in this week's developments, it can be a productive player on the Korean Peninsula in 2018 if it wishes to do so.

Japan can also play an important role, but it needs work on its relations with South Korea. A wide gap in personal political ideologies exists between the conservative Japanese Prime Minister Shinzo Abe and progressive President Moon.

Former President Park's views on North Korea policy aligned with Abe's, and under Park's leadership South Korea and Japan reached an agreement in 2015 on compensation for the crimes committed against women by the Japanese military in Korea during World War II.

Seoul's plan to re-negotiate the agreement appeals to President Moon's base but hurts relations with Tokyo. Amid rising nationalism, which will continue to increase as the enthronement of a new emperor in 2019 approaches, Japan is likely to watch this week's developments with wariness.

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.