Donald Trump has brushed off North Korea's warnings over a promised "Christmas gift" to the US, a thinly veiled yet cryptic threat that could escalate tensions after a year of failed denuclearisation talks.

Key points: North Korea has warned the US its actions will determine what "Christmas gift" it will receive

North Korea has warned the US its actions will determine what "Christmas gift" it will receive US officials are bracing for long-range missile or nuclear tests

US officials are bracing for long-range missile or nuclear tests Experts say Kim Jong-un is walking a fine line in provoking the US after stalled talks

"We'll find out what the surprise is and we'll deal with it very successfully," the US President told reporters at his Mar-a-Lago resort.

"Maybe it's a present where he sends me a beautiful vase as opposed to a missile test."

The Democratic People's Republic of Korea's (DPRK) leader Kim Jong-un has repeatedly warned US President Donald Trump he has until December 31 to deliver a breakthrough proposal to restart negotiations.

The warnings come at the end of a year of numerous rocket launches and missile tests after a lengthy lull.

With the deadline only days away, North Korean diplomat Ri Thae Song upped the ante via state media outlet Korean Central News Agency (KCNA).

"The dialogue touted by the US is, in essence, nothing but a foolish trick hatched to keep the DPRK bound to dialogue and use it in favour of the political situation and election in the US," he said.

"What is left to be done now is the US option and it is entirely up to the US what Christmas gift it will select to get."

But what Christmas gift is North Korea referring to, when might we find out, and how have we ended up back here after a series of historic summits and meetings to end the crisis?

North Korean leader Kim Jong-un visits a multiple rocket launcher site in September. ( AP: KCNA )

What could the Christmas gift be?

Many US officials speculate the "gift" could be a nuclear weapons test or the resumption of long-range missile launches.

New satellite images reveal the completion of a new structure at a factory outside Pyongyang, where the isolated state builds equipment used to launch long-range missiles.

"What I would expect is some kind of long-range ballistic missile would be the 'gift'," Pacific Air Forces General Charles Q Brown Jr told reporters this week.

This new satellite image on a North Korean missile-related site shows the construction of a new structure this month. ( AP: Planet Labs Inc, Middlebury Institute of International Studies )

North Korea expert Go Myong-Hyun told the ABC Mr Kim's gift depended on his perception of Mr Trump.

This satellite image from December 15 shows the Sohae Engine Test Stand in Tongchang-ri. ( AP: Planet Labs Inc, Middlebury Institute of International Studies )

"If he decides that Trump is no longer a worthy interlocutor, it is likely he will carry out an ICBM [Intercontinental Ballistic Missile] test, with the missile heading in a clear direction towards the continental United States and even falling near American territory," Dr Go said.

"Otherwise he will engage in lesser sorts of provocations, such as launching shorter-range ballistic missiles."

But as that provocative path is risky and likely to kill off future talks with Mr Trump, Dr Go said North Korea might gradually escalate tensions instead.

"Launching a space vehicle, which is in essence an ICBM but the payload staying in orbit instead of re-entering the earth's atmosphere, is also a possibility," he said.

"This way, North Korea would be able to demonstrate its ICBM technology without forcing Trump to respond militarily."

He could also take other measures, like launching a less-threatening missile towards Japan, combined with a strident declaration of cutting off dialogue with the US.

One source told CNN they expected it to be a new hard-line policy demanding the US take denuclearisation off the table — abandoning negotiations, giving up on sanctions relief and pressing ahead with its ideology of self-reliance by consolidating its nuclear weaponry.

Will it arrive in time for Christmas?

US officials say they are watching the North closely from December 24, but given the looming end-of-year deadline, the potential "Christmas gift" might be delivered over the broader holiday period or in the coming weeks.

South Korean retired Lieutenant General In-bum Chun told the ABC North Korea was trying to walk a fine line in sending a strong message, but not one that would sever negotiations.

"It's a political statement to intimidate and pressure dialogue. The North Koreans have a unique way of trying to convince or persuade," he said.

"They don't want this to blow up into something they can't control."

Jean Lee, Korea expert at the US-based Wilson Centre, told the ABC nuclear negotiations had not gone according to Mr Kim's plans and he had spent much of the year "trying to gain the upper hand".

That means striking a delicate balance — "finding a way to negotiate a deal with Trump that allows him to hold onto his nuclear weapons while bartering pieces of his missile program in exchange for economic and diplomatic concessions".

"The short-range missile launches are a way for Kim to put pressure on Trump without directly provoking. I believe he will continue to seek ways to improve his leverage without directly crossing Trump," she said.

Jean Lee said Mr Kim would try to find ways to leverage the US without directly crossing Mr Trump.

"A long-range missile launch would complicate things, since Kim reportedly promised Trump he would place a moratorium on such launches. However, Kim also knows such a move would force Trump to act.

"If there is a provocation on Christmas, it would be North Korea's way of reminding the region, Trump and the world that Pyongyang has the capability to disrupt our daily lives."

'Fire and fury' to 'friend': How did we get here?

Mr Trump and Mr Kim shared a historic handshake at the demilitarised zone separating the two Koreas in June 2019. ( Reuters: Kevin Lamarque )

The North Korea-US relationship is a tumultuous one — at times it has been coloured by an explosive exchange of words.

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In August 2017, after the UN Security Council approved punishing new sanctions on North Korean coal, iron, lead and seafood, designed to cut the isolated country's export revenue by two thirds.

North Korea promised "thousands-fold" revenge against the United States in response, and Mr Trump retaliated with the now-infamous words:

"North Korea best not make any more threats to the United States. They will be met with fire and fury like the world has never seen."

But since then, the rhetoric appeared to improve and incremental steps were made — in April of 2018, North Korea suspended its nuclear and long-range missile tests, ahead of summits with South Korea and the US in Singapore.

A few months later, North Korea said it had taken "significant goodwill measures" and there was "no way" they'd give up their nuclear arsenal while sanctions still stood.

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North Korea experts and critics said Mr Trump's diplomacy was superficial and failed to consider logistical difficulties, with academic Robert Kelly saying he was "winging it through Twitter".

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Despite positive signs — with Mr Trump even calling Mr Kim his "friend" — a second summit between Mr Kim and Mr Trump in Hanoi was cut short in February, with both walking out after failing to reach a deal on lifting sanctions in exchange for full nuclear disarmament.

Amid the breakdown, North Korea began firing multiple rockets again, a significant return to form after 2018 saw nearly none.

But there were symbolic gestures too — in June this year, Mr Trump became the first US president to enter North Korea, crossing the border at the Demilitarised Zone (DMZ) between North and South to shake hands with Mr Kim, calling it an honour.

Shortly after, Pyongyang launched more missiles, which Mr Trump downplayed, saying Mr Kim had offered a "small apology" in a letter that led the US President to declare, "A nuclear-free North Korea will lead to one of the most successful countries in the world".

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 1 minute 57 seconds 1 m 57 s Donald Trump meets Kim Jong-un at DMZ, crosses border

Despite the Twitter promises and letters, North Korea fired a submarine-launched ballistic missile in October, alarming experts as warnings of the December 31 deadline filtered through.

Then came the promise of a Christmas gift.

Mr Trump and Mr Kim have had a tumultuous relationship, but there was optimism for improved relations at a Singapore summit in 2018. ( AP )

'Miscalculations' and 'imminent failure': What now?

Recent reports revealed the DPRK's frustration with negotiations appeared to be deepening, with Kim Kye-gwan, a North Korean foreign ministry adviser, telling KCNA last month:

"We are no longer interested in such talks that bring nothing to us."

Mr Kim speaks during a ruling party meeting this week to decide on steps to bolster the country's military capability. ( AP: KCNA )

Dr Go said the biggest reason for the nuclear talks stalling was, "the fact that both sides believe time is on their sides".

"[The] US believed sanctions will eventually bring North Korea to its knees," he said.

North Korea expert Go Myong-hyun said launching a rocket towards the US would be risky and provocative. ( Supplied )

"These miscalculations resulted first in the impasse in negotiations and now its imminent failure."

Mr Kim is preparing his annual New Year's speech, and this week he summoned the country's top military brass at a meeting of the ruling Workers Party's Central Military Commission, in a bid to "bolster up the overall armed forces of the country … militarily and politically".

The meeting also addressed "decisive improvement" in "core matters for the sustained and accelerated development of military capability for self-defence", according to KCNA.

China, along with Russia, has floated the idea of easing sanctions against North Korea. ( AP: Susan Walsh )

Meanwhile, both China and Russia suggested the UN lift a ban on some North Korean exports, like textiles and seafood, as a solution to "break the deadlock on the peninsula".

But according to Reuters, the US State Department said there should be no consideration of "premature sanctions relief" because North Korea was "threatening to conduct an escalated provocation, refusing to meet to discuss denuclearisation".

Late last week, Mr Trump tweeted that he had spoken about the North Korea situation with Chinese President Xi Jinping, who coordinated summits with US allies South Korea and Japan about maintaining stability on the Korean peninsula.

Experts say Mr Kim is following in his father's footsteps with grand displays of military equipment. ( Reuters: Damir Sagolj )

There's a perception that impeachment proceedings against Mr Trump have weakened him domestically, leaving North Korea poised to leverage the US, according to some reports.

"North Korea believes Trump needs a diplomatic victory before the presidential election in November," Dr Go said.

'Not good news for Korean people': What to expect in 2020

According to a political forecast released last week by South Korean think tank the Asan Institute for Policy Studies, North Korea may resume military provocations in the New Year.

Experts fear North Korea will provoke the US and bolster its nuclear weaponry. ( AP: Lee Jin-man )

News agency Yonhap quoted the report as saying negotiations had been drifting towards nuclear arms control, rather than disarmament.

"Year 2020 will be a year when we have to admit that the North is slipping farther away from the denuclearisation goal," it said.

"Given that the North's military sabre-rattling is an expression of its discontent over its stalemated talks with the US, the North is expected to launch additional provocations."

Dr Go said North Korea had concluded the only language the US understood was one of provocation, which he expected would escalate gradually.

Retired Lt. Gen. In-bum Chun said he thought Mr Trump had matured and would not take military action against North Korea. ( Wikimedia commons: US Department of Defence )

"In 2020, we will see the continuation of the tug of war between the two sides over the sites that are no longer essential to North Korea's nuclear program, albeit in a more bellicose manner," he said.

Retired Lieutenant General Chun said sanctions were "the last and only thing that the free world has" to leverage North Korea on nuclear weapons.

"I'm concerned but I'm not worried, because the worrying part would have been President Trump would have gotten these ideas to take military action against North Korea," he said.

"But from what I've seen, President Trump has matured, and I think he realises that the military option is not the best option."

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Dr Kelly tweeted that "lazy Trump" had missed a "unique negotiating opportunity", preferring photo-ops to work.

While Mr Trump was battling impeachment decisions at home, Mr Kim, he said, was emulating his forebears in the communist dynasty.

"I had high hopes that the new North Korean leader would be different, that he would be more imaginative and have the courage for a better and brighter future for his country as well as the Korean peninsula," he said.

"But it seems now, as he says, he's like his grandfather and his father. It's not good news for the Korean people."

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