North Korean dictator Kim Jong-un delivered his much-anticipated New Year’s address in the early hours of Tuesday morning. As expected, the speech was largely focused on North Korea’s economy but included some mixed messages about denuclearization.

Kim said he remains committed to eliminating nuclear weapons on the Korean Peninsula and is ready for a second summit with President Donald Trump, but also warned he will “find a new way to settle peace on our peninsula” if the United States “misinterprets our people’s patience, and makes one-sided demands and continues down the path of sanctions and pressure on our republic.”

“If the United States takes sincere measures and corresponding action to our leading and pre-emptive efforts, then relations will advance at a fast and excellent pace through the process of implementing definite and groundbreaking measures,” he said.

The New Year’s address is an annual event in North Korea dating back to the reign of Kim’s grandfather, Kim Il-sung. It is designed for domestic consumption, somewhat like the State of the Union address in the United States, but is closely watched by foreign observers for clues to the dictatorship’s attitude and intentions for the coming year.

Last year’s speech was seen as especially significant because it presaged North Korea’s diplomatic opening in 2018, a shift to better relations with South Korea and a more positive international outlook that appears set to continue in 2019, judging from Kim’s latest address.

Foreign analysts found significance in the setting for the speech, with Kim dressed in a business suit and seated at a desk instead of speaking from behind a lectern, signaling a focus on commercial interests instead of militaristic belligerence.

Duyeon Kim of the Center for American Security told CNN he found Kim’s message “confident, normal, sophisticated” and “reminiscent of the feel of the Singapore summit setting” when Kim met with Trump last summer.

“But he still sent a very firm word of caution, bordering a nuanced threat, that if Washington doesn’t keep its Singapore promise and continues with sanctions, then he has Plan B in mind and will go his separate way. He’s exuding confidence that his country isn’t hung up over the US, that they can still prosper without Washington,” the analyst added.

Overall, Kim’s speech seems to have landed on the high side of analysts’ expectations, with Kim claiming he is no longer interested in nuclear weapons research (he said North Korea has reached all of its goals in that regard) and might be willing to cap weapons production if the United States reciprocates in some unspecified manner. North Korea always interprets “denuclearization” to mean removing or limiting all nuclear weapons on the Korean Peninsula, including those deployed to protect South Korea.

Although he said he wished to pursue economic development instead of nuclear missiles, Kim threatened to change course if the United States does not begin granting sanctions relief and making other reciprocal gestures in 2019. The United States has firmly insisted North Korea must achieve complete and verifiable denuclearization before sanctions will be lifted and views Pyongyang’s disarmament measures to date as largely symbolic.

“If the US does not keep its promise made in front of the whole world… and insists on sanctions and pressures on our republic, we may be left with no choice but to consider a new way to safeguard our sovereignty and interests,” Kim said, as translated by the BBC.

North Korea also interprets the pathway to peaceful relations on the Korean Peninsula as requiring an end to military cooperation between South Korea and the United States and its allies. To that end, Kim used his New Year’s address to call for a permanent end to joint military drills between the U.S. and South Korea. The drills were scaled back in 2018 to encourage North Korea’s turn towards diplomacy.

Kim also signaled a willingness to continue improving relations with South Korea. “Let’s usher in a heyday of peace, prosperity, and reunification of the Korean Peninsula by thoroughly implementing the historic North-South declarations!” he said, referring to the declarations issued after his summit with South Korean President Moon Jae-in.

Kim made offers to resume the joint economic project with South Korea at Kaesong and resume South Korean tours to the North Korean resort at Diamond Mountain. Noting that neither would be possible under current sanctions, the New York Post speculated Kim is still interested in driving a wedge between the U.S. and South Korea by making offers that will push Seoul to demand sanctions relief for the North or unilaterally defy the sanctions.

South Korean business leaders immediately welcomed Kim’s offer to resume operations at Kaesong and insisted such activity would not violate sanctions.

Adam Mount of the Federation of American Scientists saw the Kim speech overall as a counter-offer in what the North Koreans see as ongoing negotiations over how much of their nuclear capability they will give up, and the rewards they will demand in exchange. He suggested the U.S. consider taking the offer Kim appeared to put on the table Tuesday morning.

“U.S. negotiators should move decisively in the new year to find out how far Kim is willing to go toward a verified cap on his arsenal. Discussions on reducing or eliminating that arsenal come later,” said Mount.

This would make Kim’s speech the first real test of U.S. resolve on the path to denuclearization. North Korea spent 2018 trying versions of the stonewalling tactics and tricks it has used successfully against previous U.S. administrations, including supposedly historic concessions that actually did little to reduce its research capabilities or could be easily reversed.

Accepting a cap now and working toward denuclearization later, as Mount advised, could be taken by the North Koreans as a signal of weakness because the U.S. has insisted on swift and complete denuclearization. The Trump administration fears that if sanctions are loosened now, the maximum pressure needed to compel denuclearization will never be restored.

“There are views that North Korea wants a quick second summit because it thinks it can win major concessions from Trump that they probably couldn’t from lower-level U.S. officials, who are more adamant about the North committing to inspections and verification,” the New York Post observed.

South Korea’s presidential Blue House responded positively to Kim’s address. “Chairman Kim’s firm commitment is expected to have a positive effect on resolving the Korean Peninsula issue smoothly in the new year,” a presidential spokesman said on Tuesday morning.

Yonhap News quoted South Korea’s ruling Democratic Party saying Kim’s speech “brightens the prospects” for North Korean negotiations with the United States and looked forward to “epoch-making” progress in the year ahead.

The opposition Liberty Korea Party, on the other hand, noted Kim’s speech promised no concrete progress toward denuclearization and contained threats to abandon peace efforts if North Korea’s demands are not met. Liberty Korea also insisted it would be “impossible” to resume joint economic projects with North Korea unless “substantive progress” is made in dismantling Pyongyang’s nuclear arsenal.