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Yesterday, North Korea fired 500 shells of which more than 100 landed in South Korean waters as part of new live-fire exercises. South Korean marines fired back more than 300 rounds into North Korean waters. South Korea also scrambled F-15s on its side of the maritime border and evacuated residents of Baengnyeong Island.

 What does this mean?

There were no casualties reported with the exchange of artillery fire between the two Koreas today, avoiding the precipitation of a major crisis. However, we will have to watch for North Korean follow-on actions tonight (EST). North Korean behavior since late-February indicates a willingness to take higher risks than in the past. While North Korea always protests during U.S.-ROK annual exercises, the intensity (nearly 100 long- and short-range missiles/500 artillery rounds) since February 21 and the timing of its actions (in the midst of ongoing U.S.-ROK exercises) show high tolerance for risk. The chart below shows North Korean provocations since February 21, 2014.

Is there an "off-ramp"?

We cannot rule out the possibility that North Korea's heightened intransigence might be part of an effort to pressure the United States to return to negotiations. There have been a rash of unofficial track 1.5 dialogues in different parts of Asia to bring together different members of the Six-Party Talks over the next few months. But the probability of an imminent resumption of talks is not high at the moment.

What is the meaning of the threat to conduct a nuclear test?

North Korean threats of a "new form" of nuclear test suggest that either a uranium-based nuclear detonation or a detonation involving a miniaturized warhead (to weaponize a long-range ballistic missile) might be in the offing. At this point, it is difficult to predict. Commercial satellite imagery has observed activity at the test site suggesting more tunneling activity, which are telltale signs of preparations for another test.