MANY NORTH KOREANS MIGHT STARVE this winter. Disastrous floods in August worsened what was already a bad harvest. There is likely to be a 25% to 50% shortfall in grain stocks next year, and in the countryside even last summer people were visibly weak and lethargic. Fuel shortages have shut down many factories.

For a country on the edge, North Korea sure is spending heavily on its military. Last month Russian customs officials reported that they had stopped at their border a trainload of heavy weapons that North Korea had purchased in Kazakhstan for transport across Siberia to the Korean peninsula. Throughout the year, the 1.2-million-man North Korean army has mounted large-scale exercises and strengthened its artillery force near the Demilitarized Zone. The emphasis on guns over butter leaves defense analysts perplexed. Says a senior Japanese intelligence officer: "This winter will be a very dangerous time. We are very much afraid that Pyongyang might miscalculate."

Any such "miscalculation" might mean war. North Korea watchers are sharply divided over whether Pyongyang might try an all-or-nothing offensive and whether the North Korean military would stand a chance of winning. Not only are South Korea's defenses formidable, but as U.S. Secretary of Defense William Perry confirmed on a visit to Seoul two weeks ago, the U.S. is fully committed to South Korea. At the same time, there is broad agreement that the ruling elite in the north desperately wants to avoid a collapse of the country or humiliating dependence on South Korea's help. Seoul has long wanted reunification, but North Korea's rulers are mindful of the harsh fate that many East German officials met at the hands of West Germany after their reunion in 1990.

The U.S. government believes Kim Jong Il, who inherited the North Korean helm from his father Kim Il Sung, is determined to end his country's isolation. In talks on the nuclear issue, North Korean officials have dropped their usual truculence and become "business-like," say U.S. State Department officials, and they expect to reach a final agreement on providing two light-water reactors to North Korea in the coming weeks. A consortium led by the U.S., Japan and South Korea will provide the reactors in exchange for Pyongyang's agreement to stop its weapons-based nuclear program. What is more, North Korea is courting outside investment, and foreign businesspeople are now a common sight in Pyongyang's towering Koryo Hotel.

North Korea hopes that the U.S. will want to offer enough assistance, both political and economic, to stave off the chaos that a North Korean collapse would bring to the Korean peninsula. Pyongyang, for example, has withdrawn from the U.N. armistice agreement that ended the Korean War in 1953, and is insisting on a separate formal peace treaty with Washington, which would help normalize its relations with the rest of the world. Pyongyang is pushing the U.S. to lift its trade embargo, which was partly eased in January, and to encourage countries like Japan to provide more assistance.

North Korea's strategy, however, is not unfolding nearly fast enough. Investment and food aid so far amount to a trickle. But because North Korea's behavior is far from consistent, Washington is reluctant to go the extra mile. Last month a North Korean diplomat said that contrary to a key provision in last year's Geneva accord between the U.S. and North Korea., U.N. inspectors would not be allowed to visit sites at the Yongbyon nuclear facility suspected of harboring a covert bomb program. North Korea has also refused to engage in any serious dialogue with South Korea, violating another part of the agreement. The killing of two North Korean infiltrators and the capture of a third in the South last month have also raised questions about Kim's intentions.

Inconsistent behavior has spawned speculation that Kim may not be fully in charge. More than 15 months after his father's death he has not yet assumed the titles of President and Workers' Party chief. If there is a brake on young Kim's power, it is the army. On several occasions, North Korean diplomats have cited the army as the source of resistance to U.S. requests, and when Kim appears in public, he is usually visiting army units.

Kim and his technocrat friends are widely believed to favor a diplomatic solution to the country's ills. In a 1980s tape recording of conversations with a visitor that recently surfaced in South Korea, he criticizes the failings of the socialist system. That tends to support the view that he favors opening North Korea. But intelligence analysts admit that no one knows what the army leadership, still in the hands of gerontocrats of Kim Il Sung's era, thinks about Kim junior or the future.

As Kim Jong Il's efforts to rescue the country founder, could he--or whoever is in charge--take the desperate option? North Korea's armed forces are at peak strength, but their position will erode as the economy crumbles and South Korea continues a long-term military buildup. Last week South Korea rolled out its first locally assembled F-16 jet fighter, so North Korean hard-liners know that time is running out. "They have squandered so much on their military option, that's all they have left," says a veteran U.S. security expert in Seoul. "What other options do they have if they see no other path to survival?"