North Korea could reach US with nuclear arms."

North Korea's continuing development of nuclear technology and long-range ballistic missiles will move it closer to its stated goal of being able to hit the United States with an atomic weapon, a new Pentagon report to Congress said on Thursday.

The report, the first version of an annual Pentagon assessment required by law, said Pyongyang's Taepodong-2 missile, with continued development, might ultimately be able to reach parts of the United States carrying a nuclear payload if configured as an intercontinental ballistic missile.

North Korea launched a multi-stage rocket that delivered a satellite into orbit in December, an advance that "contributes heavily" to the country's development of a long-range ballistic missile capability, the report said.

It is also continuing to refine its atomic weapons capability, including with a nuclear detonation in February, and is capable of conducting "additional nuclear tests at any time," the report said.

The document characterized North Korea as one of the biggest U.S. security challenges in the region because of its effort to develop nuclear arms and missiles, its record of selling weapons technology to other countries and its willingness to "undertake provocative and destabilizing behavior."

The report comes at a sensitive time in the region, with friction between Washington and Pyongyang only now beginning to ease following two months of increasingly shrill rhetoric that seemed to edge the Korean peninsula close to war.