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* Obama says test makes North Korea more isolated
* North says nuclear test was self-defence against U.S.
* Miniaturised, lighter nuclear device used, says KCNA
* China, put in a tight spot, summons North Korean ambassador
By David Chance and Jack Kim
SEOUL, Feb 13 (Reuters) - U.S. President Barack Obama said North Korea's third nuclear test, in defiance of U.N. resolutions, was a threat and a provocation and that the United States would lead the world in responding.
North Korea has said Tuesday's test was an act of self-defence against "U.S. hostility" and threatened stronger steps if necessary.
"Provocations of the sort we saw last night will only isolate them further, as we stand by our allies, strengthen our own missile defense, and lead the world in taking firm action in response to these threats," Obama said in his State of the Union address, delivered 24 hours after the North's test.
North Korea tested nuclear devices in 2006 and 2009. But despite the three tests and a long-range rocket launch, it is not believed to be close to manufacturing a nuclear missile capable of targeting the United States.
But Washington believes the isolated state's ultimate aim is to design an intercontinental ballistic missile capable of carrying a nuclear warhead that could reach the continental United States. North Korea says its rocket programme is aimed at putting satellites in space.
The latest test has drawn condemnation from around the world, including from China which for years has been the North's only major ally.
The U.N. Security Council held an emergency meeting at which its members, including China, "strongly condemned" the test and vowed to start work on appropriate measures in response, the president of the council said.
North Korean leader Kim Jong-un, the third member of his family to rule, has presided over two long-range rocket launches and a nuclear test during his first year in power, pursuing policies that have propelled his impoverished and malnourished country closer to becoming a nuclear weapons power.
North Korea said the test had "greater explosive force" than those in 2006 and 2009. Its KCNA news agency said it had used a "miniaturised" and lighter nuclear device, indicating it had again used plutonium, which is suitable for use as a missile warhead.
China, which has shown signs of increasing exasperation with the recent bellicose tone of its reclusive neighbour, summoned the North Korean ambassador in Beijing and protested sternly, the Chinese Foreign Ministry said.
Foreign Minister Yang Jiechi said China was "strongly dissatisfied and resolutely opposed" to the test and urged North Korea to "stop any rhetoric or acts that could worsen situations and return to the right course of dialogue and consultation as soon as possible".
Analysts said the test was a major embarrassment to China, which is a permanent member of the Security Council and North Korea's sole major economic and diplomatic ally.
Obama said the test would be a setback for North Korea's economic development.
"The regime in North Korea must know that they will only achieve security and prosperity by meeting their international obligations," he said.
U.S. ambassador to the United Nations Susan Rice said Washington and its allies intended to "augment the sanctions regime" already in place due to Pyongyang's previous atomic tests. North Korea is already one of the most heavily sanctioned states in the world and has few external economic links that can be targeted.
Japanese Prime Minister Shinzo Abe said the test was a "grave threat" that could not be tolerated.
Russian Foreign Minister Sergei Lavrov urged North Korea to abandon its nuclear arms programme and return to talks. NATO condemned the test as an "irresponsible act."
South Korea, still technically at war with North Korea after a 1950-53 civil war ended in a truce, also denounced the test. Obama spoke to South Korean President Lee Myung-bak on Tuesday and told him the United States "remains steadfast in its defence commitments" to South Korea, the White House said.
North Korea's Foreign Ministry said the test was "only the first response we took with maximum restraint".
"If the United States continues to come out with hostility and complicates the situation, we will be forced to take stronger, second and third responses in consecutive steps," it said in a statement carried by the KCNA news agency.
North Korea - which gave the U.S. State Department advance warning of the test - often threatens the United States and its "puppet", South Korea, with destruction in colourful terms.
North Korea told the U.N. disarmament forum in Geneva that it would never bow to resolutions on its nuclear programme and that prospects were "gloomy" for the denuclearisation of the divided Korean peninsula because of a "hostile" U.S. policy.
The magnitude of the explosion was roughly twice that of the 2009 test, according to the Vienna-based Comprehensive Nuclear-Test Ban Treaty Organization.
U.S. intelligence agencies were analysing the event and found that North Korea probably conducted an underground nuclear explosion with a yield of "approximately several kilotons", the Office of the Director of National Intelligence said.
Nuclear experts have described the previous two tests as puny by international standards. The yield of the 2006 test has been estimated at less than 1 kiloton (1,000 tons of TNT equivalent) and the second at some 2-7 kilotons, compared with 20 kilotons for a Nagasaki-type bomb.
Initial indications are that the test involved the latest version of a plutonium-based prototype weapon, according to one current and one former U.S. national security official. Both previous tests involved plutonium. If it turns out the test was of a new uranium-based weapon, it would show that North Korea had made more progress on uranium enrichment than previously thought.
When Kim Jong-un, who is 30, took power after his father's death in December 2011, there were hopes that he would bring reforms and end Kim Jong-il's "military first" policies.
Instead, North Korea, whose economy is smaller than it was 20 years ago and where a third of children are believed to be malnourished, appears to be trapped in a cycle of sanctions followed by further defiance.
"The more North Korea shoots missiles, launches satellites or conducts nuclear tests, the more the U.N. Security Council will impose new and more severe sanctions," said Shen Dingli, a professor at Shanghai's Fudan University.
"It is an endless, vicious cycle."
Options for a response from the international community appear to be few. Diplomats at the United Nations said negotiations on new sanctions could take weeks since China is likely to resist tough new measures for fear they could lead to further retaliation by the North Korean leadership.
Significantly, the test comes at a time of political transition in China, Japan and South Korea, and as Obama begins his second term.
The North's longer-term game plan may be to restart international talks aimed at winning food and financial aid. China urged it to return to the stalled "six-party" talks on its nuclear programme, hosted by China and including the two Koreas, the United States, Japan and Russia. (Additional reporting by Jack Kim, Christine Kim and Jumin Park in SEOUL; Linda Sieg in TOKYO; Louis Charbonneau and Michelle Nichols at the UNITED NATIONS; Fredrik Dahl in VIENNA; Michael Martina and Chen Aizhu in BEIJING; Mette Fraende in COPENHAGEN; Adrian Croft, Charlie Dunmore and Justyna Pawlak in BRUSSELS; Mark Hosenball, Paul Eckert, Roberta Rampton, Tabassum Zakaria and Jeff Mason in WASHINGTON; Editing by Raju Gopalakrishnan)