UPDATE 6-N.Korea says will boost nuclear deterrent after UN rebuke

* North Korea space agency will now be blacklisted

* Council warns North against new nuclear test

* China says sanctions alone don't work, more diplomacy

needed

* Pyongyang continues work on nuclear test site, test seen

some way off

(Adds U.S. envoy comments, paragraphs 7-8, Russian comment,

paragraph 10)

UNITED NATIONS, Jan 23 (Reuters) - The U.N. Security Council

unanimously condemned North Korea's December rocket launch and

expanded existing U.N. sanctions, and Pyongyang reacted with a

vow to boost the North's military and nuclear capabilities.

While the resolution approved by the 15-nation council on

Tuesday does not impose new sanctions on Pyongyang, diplomats

said Beijing's support for it was a significant diplomatic blow

to Pyongyang.

The resolution said the council "deplores the violations" by

North Korea of its previous resolutions, which banned Pyongyang

from conducting further ballistic missile and nuclear tests and

from importing materials and technology for those programs.

It also said the council "expresses its determination to

take significant action in the event of a further DPRK (North

Korean) launch or nuclear test".

North Korea reacted quickly, saying it would hold no more

talks on the de-nuclearization of the Korean peninsula and would

boost its military and nuclear capabilities.

"We will take measures to boost and strengthen our defensive

military power including nuclear deterrence," its Foreign

Ministry said in a statement carried by state news agency KCNA.

The United States' special envoy on North Korea, arriving in

Seoul on Wednesday to meet his South Korean counterparts, urged

Pyongyang to back down from further provocative actions but left

the door open for dialogue.

"If they can... begin to take concrete steps to indicate

their interests in returning to diplomacy, they may find willing

partners in that process," Glyn Davies told reporters.

Six-party talks aimed at halting North Korea's nuclear

program have involved North Korea, the United States, China,

Japan, Russia and South Korea. They have been held

intermittently since 2003 but have stalled since 2008.

Russia's foreign minister said on Wednesday that North Korea

should pay heed to the international community and adhere to

limits on its missile and nuclear programmes.

South Korea says the North is technically ready for a third

nuclear test, and satellite images show it is actively working

on its nuclear site. However, political analysts said they

viewed a test as unlikely in the near-term.

"North Korea will likely take a sequenced strategy where the

first stage response would be more militarily aggressive actions

like another missile launch," said Yang Moo-jin of the

University of North Korean Studies in Seoul.

There are concerns that North Korea could stage a test using

highly enriched uranium for the first time, which would give it

a second path to a nuclear bomb and enable it to preserve its

stocks of plutonium, which are believed to be sufficient for

about 12 nuclear devices.

The U.N. resolution added six North Korean entities,

including Pyongyang's space agency, the Korean Committee for

Space Technology, and the man heading it, Paek Chang-ho, to an

existing U.N. blacklist.

BLACKLISTED

The firms and individuals will all face an international

asset freeze, while Paek and the others blacklisted by Tuesday's

resolution -- the manager of the rocket launch center and two

North Korean banking officials -- will face a global travel ban.

In addition to the space agency, the council blacklisted the

Bank of East Land, Korea Kumryong Trading Corp., Tosong

Technology Trading Corp., Korea Ryonha Machinery Joint Venture

Corp., and Leader (Hong Kong) International.

Leader, based in Hong Kong, is an agent for KOMID, a North

Korean mining and trading company that was sanctioned in 2009

and is the North's main arms dealer, the resolution said.

U.S. Ambassador to the United Nations Susan Rice welcomed

the resolution, describing it as introducing "new sanctions"

against North Korea. "This resolution demonstrates to North

Korea that there are unanimous and significant consequences for

its flagrant violation of its obligations under previous

resolutions," she said.

Other diplomats, however, said on condition of anonymity

that describing the measures in Tuesday's resolution were new

sanctions would be an exaggeration.

China, the North's only major diplomatic ally, said on

Monday the Security Council needed to pass a cautious resolution

on North Korea, adding that this was the best way to ensure

regional tensions did not escalate further.

Chinese Ambassador Li Baodong said certain elements in the

resolution's original draft, which in China's view would

"jeopardize" normal trade between North Korea and other

countries, had been removed, the official Xinhua news agency

reported.

"Sanctions and resolutions alone do not work," Xinhua quoted

him as saying. "Resolutions must be completed and supplemented

by diplomatic efforts."

Several diplomats said Beijing's decision to back the

resolution sent a strong message to Pyongyang.

"It might not be much, but the Chinese move is significant,"

a council diplomat told Reuters. "The prospect of a (new)

nuclear test might have been a game changer (for China)."

The United States had wanted to punish North Korea for the

rocket launch with a Security Council resolution that imposed

entirely new sanctions against Pyongyang, but Beijing rejected

that option. China agreed to U.N. sanctions against Pyongyang

after North Korea's 2006 and 2009 nuclear tests.

December's successful long-range rocket launch, the first to

put a satellite in orbit, was a coup for North Korea's young

leader, Kim Jong-un.

North and South Korea are still technically at war because

their 1950-53 conflict ended in a truce, not a treaty.

(Additional reporting by Jumin Park, David Chance and Jack Kim

in SEOUL, and Ben Blanchard in BEIJING; Editing by Raju

Gopalakrishnan)

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