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 US 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 US 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 continues to refine its atomic weapons capability, including a nuclear detonation test in February, and can conduct "additional nuclear tests at any time," the report said.

"These advances in ballistic-missile delivery systems, coupled with developments in nuclear technology [...] are in line with North Korea's stated objective of being able to strike the US homeland," the report said.

"North Korea will move closer to this goal, as well as increase the threat it poses to US forces and allies in the region, if it continues testing and devoting scarce regime resources to these programs," it said.

The document characterized North Korea as one of the biggest US 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."

It also stated that the Korean People's Army (KPA) - an umbrella organization comprising ground, air, naval, missile, and special operations forces - ranks in personnel numbers as the world's fourth largest military.

The report said the KPA poses a continuous threat to the South and deployed US forces.

"However, after decades under a failed economy and the resulting food shortages, the KPA is a weakened force that suffers from logistical shortages, aging equipment, and poor training," it said.

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.

Tensions between the two countries rose sharply after North Korea put the satellite into space in late December and conducted the nuclear test in February. The test triggered new UN sanctions, which led to a barrage of threats from Pyongyang.

The US has firmly rejected North Korean demands that it be recognized as a nuclear-armed state.

Washington has stepped up its diplomacy with China over the issue.