BRUSSELS (Reuters) - North Korea is unlikely to respond militarily to planned U.N. sanctions for its nuclear test, although the possibility should not be completely dismissed, U.S. Defense Secretary Robert Gates said on Thursday.

The draft U.N. Security Council resolution, written by the United States and endorsed by the four other permanent members plus Japan and South Korea, aims to hit the North's meager finances and authorize inspections of its cargo shipments. It is scheduled to be put to the vote on Friday.

"I don't think that there has been a commensurate change in the posture of the North Korean military that would suggest an attempt to undertake operations," Gates told reporters as he arrived in Brussels for a meeting of NATO defense ministers.

But he said Pyongyang was so unpredictable that it was probably "not wise" to dismiss out of hand North Korean threats of military action.

A Russian foreign ministry source, quoted by Itar-Tass news agency, took a similar line, saying Moscow did not expect the resolution to "whip up" the situation.

"We don't expect any actions to follow, including from North Korea, that would lead to an escalation of tension."

North Korea has been subjected to sanctions for years for military moves condemned by regional powers. Analysts are not sure if new measures will have much impact on the impoverished state, whose economy has grown weaker since leader Kim Jong-il took over in 1994.

Some experts believe the resolution could draw sharp rebuke from the prickly North, which has threatened to test-fire an intercontinental ballistic missile unless the Security Council apologizes for punishing it for an April rocket launch widely seen as a disguised long-range missile test.

North Korea has angered Asian neighbors and countries beyond in the past few weeks with missile launches, threats to attack the South and the nuclear test, prompting U.S. and South Korean forces to raise a military alert on the peninsula to one of its highest since the 1950-53 Korean War.

BLACKLIST INEFFECTIVE

President Barack Obama's special envoy for North Korea, Stephen Bosworth, said the United States is taking defensive measures and preparing sanctions against Pyongyang due to the nuclear test but prefers to settle matters through diplomacy.

"Our strong preference is to engage in serious, effective diplomacy," Ambassador Stephen Bosworth told the Senate Foreign Relations Committee on Thursday.

Bosworth said putting North Korea back on the U.S. blacklist of state sponsors of terrorism would do little to penalize Pyongyang because most of the related sanctions are already applied under other U.S. laws.

Bosworth told the panel Washington was working through the United Nations and with allies Japan and South Korea to step up sanctions and pressure on the North but preferred to return to six-nation nuclear talks with Pyongyang that also includes Russia and China.

Asked about curbs on North Korean finances, Bosworth told the committee: "We are looking at additional measures which will be very carefully targeted."

He also told lawmakers the United States has seen no formal designation of a successor to Kim Jong-il.

South Korea's defense minister said on Wednesday he saw the North's military moves as being aimed at building internal support for Kim's government as the 67-year-old leader prepares for succession in Asia's only communist dynasty.

COMPROMISES

The U.N. draft "condemns in the strongest terms" North Korea's nuclear test last month and "demands that (it) not conduct any further nuclear test or any launch using ballistic missile technology."

The end result reflects compromises to satisfy Chinese and Russian objections and is almost certain to be approved as it is backed by all five veto-wielding permanent council members.

Several U.N. diplomats said the 15-nation U.N. Security Council has scheduled a meeting at 10 a.m. (10 a.m. EDT) on Friday to vote on the sanctions resolution.

Beijing and Moscow had opposed language requiring all nations to inspect North Korean ships carrying suspicious cargo that might violate a partial U.N. trade and arms embargo.

In the latest version, the Security Council "calls upon" states to inspect suspicious sea, air and land cargoes, but does not demand it. Arms sales are one of North Korea's few sources of hard cash.

The North has been preparing to test-launch as early as this month a long-range missile that could hit U.S. territory and mid-range missile that can hit all of South Korea and most of Japan, South Korean officials have said.

MISSILE WORK WITH IRAN

The head of the Pentagon's Missile Defense Agency said on Thursday that North Korea has been working with Iran to develop missiles for years and they have made significant progress.

"It really is an international effort going on out there to develop ballistic missile capability between these countries," Army Lieutenant General Patrick O'Reilly told a forum in Washington.

Like North Korea, Iran is at odds with much of the international community over its nuclear program. Both countries have demonstrated a capability to launch missiles with more than one stage, critical to more advanced systems.

They are sharing know-how on avionics, propulsion and materials, O'Reilly said, and their ability to fire missiles with a stable ignition and launch a second stage represents "a significant step forward."