SINCE early March this year tension in the Korean Peninsula has been spiraling and has now reached a worrying point. Pyongyang has been making threats of attacking South Korean targets and US bases in the region. How has all this come to pass?

The Korean War, which ended with the Armistice in 1953, left the peninsula divided along the 38th N parallel. North Korea, a cold war ally of USSR, has been at odds with the West over its nuclear programme since 1985.

Communist North Korea, since the very beginning, has been suffering from a sense of insecurity. Pyongyang has always looked upon South Korea as a threat because of the presence of American bases. This sense was further strengthened by the fear that unification of the Peninsula will lead to the elimination of Communist Party.

China replaced USSR as North Korea's trading partner at the end of the cold war and collapse of Soviet Union. China currently supplies North Korea with 80% of its fuel imports and almost 70% of its food requirements.

With a population of 24 million (2011) and a GDP of $40 billion (2011) Pyongyang's security paranoia pushed it to make tremendous strides in developing its military might. Diversion of resources to the military has left the country impoverished in agriculture. Famine stalked the country between 1994 and 1998, which led to deaths of 3 million people (according to some estimates). Yet North Korea has one of the largest armies in the world -- 1.1 million men. In May 2009 it successfully tested an underground nuclear device after its first attempt in 2006 failed.

The North also developed missiles of different ranges despite stiff UN sanctions. Armed and emboldened with this arsenal North Korea has been threatening South Korea and USA from time to time.

The current round of anger and threats began when North Korea carried out its third nuclear test on February 12, 2013, drawing condemnation from around the world, including China. The United Nations moved to tighten financial restrictions on North Korea.

To make matters worse US-South Korea annual military exercise began on March 11. US Air Force flew stealth aircraft, capable of carrying nuclear device, in a show of strength. Pyongyang saw a serious menace to its security and threatened South Korea with nuclear attack. The North Korean statement said the "ever-escalating US hostile policy towards DPRK and its reckless nuclear threat will be smashed." On March 30, Pyongyang announced abrogation of the 1953 Armistice and that it was entering into a "state of war" with the South. It also declared that the dormant Yongbyon nuclear reactor was being re-commissioned. North Korea also moved two missile batteries to the East coast, sending jitters that a launch may be imminent.

To these threats US Secretary of State John Kerry firmly said: "What Kim Jong-Un has been choosing to do is provocative and reckless, and the United States will not accept DPRK as a nuclear state." Kerry also stated: "The United States will defend our allies and we will not be subject to irrational or reckless provocation." Meanwhile, America beefed up its bases in the region with anti-missile batteries and has moved nuclear capable naval vessels closer to the peninsula.

China, North Korea's neighbour and ally, is worried at the rhetoric coming out of Pyongyang. Beijing expressed "serious concern" and requested the international community to "remain calm" and "exercise restraint." Though many believe that China has strong leverage over North Korea, recent events suggest the contrary. China can ask Pyongyang not to do anything rash, but cannot actually restrain Kim Jong-Un.

China is not only embarrassed at Kim Jong-Un's rhetoric, it is also deeply annoyed with Pyongyang. Exasperated, it has stopped supplying fuel to North Korea. Washington, taking advantage of Chinese ire over North Korea and an apparent shift in its policy, has been talking to Chinese President Xi Jinping to restrain North Korea. China knows that even a small military incident will lead American to expand its military presence in the region -- something Beijing definitely will not relish.

Observers believe that young and inexperienced Kim Jong-Un is trying to assert his authority over his party and the military establishment through the current war rhetoric. He wants to prove that he is the strongman of North Korea, like his father and grandfather.

Russia, also close to North Korea, is worried and angry. A foreign ministry spokesman in Moscow strongly criticised Pyongyang for its "defiant neglect" of UNSC Resolutions and said: "We are counting on maximum restraint and composure from all sides."

United Nations Secretary General Ban Ki-moon appealed to North Korea to change course saying it has "gone too far" in its rhetoric. Clearly, the stakeholders do not want any conflagration in the Korean Peninsula.

To further heighten the tension North Korea, on April 5, asked foreign embassies in Pyongyang to evacuate as it cannot ensure their safety after April 10, in case there is conflict.

What will be the consequences if the current rhetoric plays out?

Given the fact that China is irritated with North Korea, one can probably assume that it may not get militarily involved in any conflict in the Korean Peninsula. In that case, North Korea cannot win the war because of superiority of US-backed South Korean war machine. In that scenario, North Korea will most certainly be overrun by South Korea. That may lead to unification of the divided Peninsula, pushing thousands of Korean as refugees into China. North Korea's Communist Party and leadership will disappear. That means a united Korea with US bases with nuclear weapons and large number of troops will be in China's backyard -- a very unpleasant scenario for Beijing to contemplate.

North Korea knows that it cannot win any war with US-backed South Korea, but can cause real damage with the missiles and nuclear bombs it has. Clearly, it is using its nuclear capability as a bargaining card. Sanctions have stifled the North Korean economy. Pyongyang wants recognition as a nuclear nation and wants the sanctions removed.

Though tension in the region is at an all-time high, Washington has been playing down the threat. The Americans are talking to Moscow and Beijing to de-escalate the tension. Washington, so far, has not got involved in the war of words despite provocations, except for a firm statement from John Kerry. China too wants de-escalation of tension in the region.

Desperation and paranoia can sometimes lead to actions that may not bode well. The sooner the drums of war stop in the Korean Peninsula the better will it be for all.

The writer is a former Ambassador and Secretary.