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The U.N. nuclear watchdog has "serious concern" about North Korea's atomic programme, it said in an annual report to members on Wednesday, urging the country to comply with Security Council resolutions.

International Atomic Energy Agency (IAEA) chief Rafael Grossi had sounded the alarm in June, noting that building work expanding key facilities at North Korea's main nuclear site at Yongbyon was advancing.

The reclusive state has staged a series of missile tests this year and some analysts believe it is preparing to resume testing nuclear weapons after a five-year hiatus.

In the annual report released on Wednesday, the IAEA said excavation work commenced in March near Adit 3 at a nuclear test site close to the settlement of Punggye-ri to reopen the test tunnel after its partial demolition in May 2018. Excavation work at Adit 3 was possibly completed by May, it said.

Several timber support buildings were also built at the site, and the IAEA observed work to shore up portions of a washed-out road nearby.

"The reopening of the nuclear test site is deeply troubling, as is the expansion of the reported centrifuge enrichment facility (at Yongbyon) and the continued operation of the 5MW(e) reactor and other facilities," the agency said in a summary of its findings.

"The continuation of the DPRK's nuclear programme is a clear violation of relevant UN Security Council resolutions and is deeply regrettable," it added, using the acronym for the Democratic People's Republic of Korea.

Grossi called upon the country to comply with its obligations under U.N. Security Council resolutions, cooperate with the IAEA, and resolve outstanding issues, especially those that have arisen since IAEA inspectors left in 2009. (Reuters)