America will need to soon decide how to confront the threat of North Korea’s nuclear weapons programme, a top official said.

“Decision time is becoming ever closer in terms of how we respond to this,” US Director of National Intelligence Dan Coates told the Senate Intelligence Committee. “Our goal is a peaceful settlement. We are using maximum pressure on North Korea in various ways”.

The world has so far failed to deter North Korean testing, with the regime detonating a hydrogen bomb and trialling increasingly sophisticated ballistic missiles, even as United Nations sanctions pile up in an effort to stifle the country’s economy and alter its regime’s behaviour.

Mr Coats warned that North Korea’s expansion of its military arsenal — both its burgeoning stock of ballistic missiles and nuclear warheads and its “longstanding” chemical and biological weapons initiatives — would  “constitute a major threat to the United States and to our allies”.

“North Korea will be the most volatile and confrontational WMD threat in the coming year”, Mr Coats said, adding that North Korea posed an “existential problem for the United States”.

Donald Trump and his surrogates have urged a peaceful resolution but have never abandoned the possibility of a military response. Mr Trump and Pyongyang have exchanged threats of annihilation, with Mr Trump derisively nicknaming North Korean leader Kim Jong-un “Little Rocket Man” and warning America might be forced to “totally destroy North Korea” during a speech before the United Nations.

The Winter Olympics in Pyeongchang, South Korea have brought an unexpected thaw, with North Korean athletes joining their southern brethren and the sister of Mr Kim making an unprecedented visit to Seoul, where she met with South Korean President Moon Jae-in and extended an invitation for Mr Moon to visit Pyongyang.

Even as those developments have raised hopes of a diplomatic breakthrough, American officials have been cautious about letting Pyongyang off the hook.

Vice President Mike Pence pointedly criticised the regime’s abusive behaviour and, while he floated the idea of holding negotiations, he said North Korea would still need to abandon its nuclear ambitions. He did not interact with Ms Kim despite sitting near her.

“No pressure comes off until they are actually doing something that the alliance believes represents a meaningful step toward denuclearisation,” Mr Pence told reporters.

North Korea has taken advantage of the world’s attention focusing on the Korean Peninsula for the games, flexing its muscle by parading missiles and tanks down the streets of Pyongyang on the eve of the Olympic games.