The U.N. atomic agency says North Korea appears to have restarted the operation of its main nuclear reactor used to produce weapons fuels.

The annual report by the International Atomic Energy Agency comes as North Korea openly threatens to enlarge its nuclear arsenal amid long-dormant nuclear diplomacy with the United States.

The report refers to a 5-megawatt reactor at the North's main nuclear complex in Yongbyon, north of Pyongyang. The reactor produces plutonium, one of the two key ingredients to build nuclear weapons along with highly enriched uranium.

"Since early July 2021, there have been indications, including the discharge of cooling water, consistent with the operation of the reactor," said the IAEA report dated Friday.

The agency uses satellite imagery and open-source information to monitor developments in North Korea's nuclear program.

"(North Korea's) nuclear activities continue to be a cause for serious concern. Furthermore, the new indications of the operation of the 5-megawatt reactor and the radiochemical laboratory are deeply troubling," the IAEA said.

According to the Associated Press, North Korean leader Kim Jong Un offered to dismantle the nuclear complex in a 2019 summit with President Donald Trump if the U.S. agreed to lift some sanctions on the country. The Americans ultimately rejected the offer because it would only be a partial surrender of North Korea's nuclear capability.