Australia cannot afford to be naive about North Korea's participation in the 2018 Winter Olympics, the foreign minister says.
On Wednesday, the rogue state announced Kim Yo Jong, the younger sister of leader Kim Jong Un, would be attending the games in South Korea, which open on Friday.
"We mustn't be naive about what this means," Foreign Affairs Minister Julie Bishop told reporters in Canberra on Thursday.
"But we should encourage more dialogue between north and south if it leads to North Korea abiding by its international obligations to cease its illegal weapons and nuclear programs."
North and South Korea will march together during the opening ceremony of the games, with the north sending 22 athletes - skaters, skiers and ice hockey players - to compete.
But it will also hold a major military parade celebrating its 70th anniversary on the eve of the opening ceremony.
"We hope that the Winter Olympics may go some way in encouraging North Korea into dialogue, to get them back to the negotiating table," Ms Bishop said.
"The fact remains, North Korea is in defiance of numerous United Nations Security Council resolutions regarding its illegal weapons program."
To that end, US Vice President Mike Pence announced on Wednesday the "toughest and most aggressive" round of sanctions targeting North Korea yet over its nuclear program.
Shadow foreign affairs minister Penny Wong claimed Australia needed to find a balance between sanctions and engagement in addressing the North Korean threat.
The international community needed to remain united and firm in implementing sanctions.
"(North Korea) are the greatest threat to peace and stability, not just in our region but in the world," Senator Wong said.
"But it is a good opportunity for there also to be dialogue."
