The US is keeping a close watch on North Korea for signs of a possible missile launch or nuclear test conducted as a “Christmas gift.”

The North Koreans warned of a launch or test in early December, saying the Trump administration was running out of time to salvage nuclear negotiations, and it was up to the US to choose what “Christmas gift ” it gets from the North, the Associated Press reported.

A significant launch could put an end to North Korea’s self-imposed moratorium on missile tests and raise tensions in the region. It would also deliver a major blow to one of the Trump administration’s major foreign policy initiatives: a negotiation with North Korea to eliminate its nuclear weapons and missiles.

Earlier this month, North Korea conducted an engine test it described as “crucial,” and experts believe it may have involved an engine for a space-launch vehicle or long-range missile.

“North Korea has been advancing. It has been building new capabilities,” said Anthony Wier, a former State Department official who tracks nuclear disarmament for the Friends Committee on National Legislation. “As long as that continues, they gain new capabilities to try new missiles to threaten us and our allies in new ways.”

President Trump tweeted Friday that he had discussed North Korea with China’s President Xi Jinping.

Defense Secretary Mark Esper downplayed speculation of a missile test around Christmas.

“I’ve been watching the Korean Peninsula for a quarter-century now. I’m familiar with their tactics, with their bluster,” he said. “We need to get serious and sit down and have discussions about a political agreement that denuclearizes the peninsula. That is the best way forward and arguably the only way forward if we’re going to do something constructive.”