Park Geun-hye has become South Korea's first female president and returned to the presidential mansion where she grew up with her dictator father.

As president, Park will face stark divisions in South Korean society. South Koreans worry about a growing gap between rich and poor, and there's pressure for her to live up to her campaign suggestion that she can return the country to the strong economic growth her strong-man father oversaw.

Park technically took over as the clock struck midnight. Her swearing-in ceremony Monday was to be attended by tens of thousands, including international dignitaries.

Park will also face divisions with rival North Korea, which detonated an underground nuclear device about two weeks ago.

Pyongyang, Washington, Beijing and Tokyo are all watching to see if Park pursues an ambitious engagement policy meant to ease five years of animosity on the divided peninsula or if she sticks with the tough stance of her fellow conservative predecessor, Lee Myung-bak.

'The overall policy direction on North Korea among the U.S., Japan and South Korea will be hers to decide.'—Victor Cha, former senior Asia adviser to former U.S. president George W. Bush

Park's decision is important because it will likely set the tone of the larger diplomatic approach that Washington and others take in stalled efforts to persuade North Korea to give up its nuclear weapons ambitions.

It will also be complicated by North Korea's warning of unspecified "second and third measures of greater intensity," a threat that comes as Washington and others push for tightened UN sanctions as punishment for the Feb. 12 atomic test, the North's third since 2006.

That test is seen as another step toward North Korea's goal of building a bomb small enough to be mounted on a missile that can hit the United States. The explosion, which Pyongyang called a response to U.S. hostility, triggered global outrage.

World power approach to North Korea 'hers to decide'

Park has said she won't yet change her policy, which was built with the high probability of provocations from Pyongyang in mind. But some aren't sure if engagement can work, given North Korea's choice of "bombs over electricity," as American scientist Siegfried Hecker puts it.

"Normalization of relations, a peace treaty, access to energy and economic opportunities — those things that come from choosing electricity over bombs and have the potential of lifting the North Korean people out of poverty and hardship — will be made much more difficult, if not impossible, for at least the next five years," Hecker, a regular visitor to North Korea, said in a posting on Stanford University's Center for International Security and Cooperation website.

As she takes office, however, Park will be mindful that many South Koreans are frustrated at the state of inter-Korean relations after the Lee government's five-year rule, which saw two nuclear tests, three long-range rocket launches and attacks blamed on North Korea that killed 50 South Koreans in 2010.

Park's policy calls for strong defence but also for efforts to build trust through aid shipments, reconciliation talks and the resumption of some large-scale economic initiatives as progress occurs on the nuclear issue. Park has also held out the possibility of a summit with new North Korean leader Kim Jong-un.

Much is riding on Park's conclusion.

"The overall policy direction on North Korea among the U.S., Japan and South Korea will be hers to decide," said Victor Cha, a former senior Asia adviser to former U.S. president George W. Bush. "If Park Geun-hye wants to contain, the U.S. will support that. But if Park Geun-hye, months down the road, wants to engage, then the U.S. will go along with that too."

Park visited North Korea in 2002

Engagement by Park would provide a sharp contrast with the rule of her father, Park Chung-hee, whose antipathy toward Pyongyang during his 18-year rule in the 1960s and 70s prompted a failed attack on the Blue House by 31 North Korean commandos in 1968. In 1974, Park's wife was shot and killed by a Japan-born Korean claiming he was acting on assassination orders by North Korea founder and then leader Kim Il-sung.

Critics say Park Geun-hye's North Korea policy lacks specifics. They also question how far she can go given her conservative base's strong anti-Pyongyang sentiments.

Park Geun-hye, who took office as South Korea's first female president on Monday, bows in front of the grave of her father Park Chung-hee, the country's former dictator. (Jung Yeon-je/File/Associated Press)

But Park has previously confounded ideological expectations. She travelled to Pyongyang in 2002 and held private talks with the late Kim Jong-il, the father of Kim Jong-un, and her gifts to Kim Jong-il are showcased in a museum of gifts to the North Korean leaders. During the often contentious presidential campaign, she responded to liberal criticism by reaching out to the families of victims of her father's dictatorship.

She said in her 2007 autobiography that she visited Pyongyang because she thought her painful experiences with the North made her "the one who could resolve South-North relations better than anyone else." She also wrote that Kim Jong-il apologized for the 1968 attack.

"I don't think this latest spike in the cycle of provocation and response undermines her whole platform of seeking to somehow re-engage the North," said John Delury, an analyst at Seoul's Yonsei University.

North Korea wants a return of large-scale aid and investment from South Korea.

Park pushes North Korean engagement

Before the election, Pyongyang's state media repeatedly questioned the sincerity of Park's engagement overture. Since the election, however, although regular criticism of Lee as "human scum" continues, the North's official Korean Central News Agency hasn't mentioned Park by name, though her political party is still condemned.

Pyongyang sees the nuclear crisis as a U.S.-North Korea issue, Delury said. "From a North Korean mindset, ramping up the tension and hostility with the U.S. does not equal jettisoning relations with the South."

Park may take a wait-and-see stance in coming months.

A possible positive turning point could come if North Korea resists tests or launches during April, when it celebrates two state anniversaries — Kim Il-sung's birthday and the army's founding anniversary — according to analyst Hong Hyun-ik at the private Sejong Institute in South Korea. Pyongyang conducted a failed long-range rocket launch during last year's celebrations.

Hong predicts that the United States will seek nuclear talks with North Korea in a few months, something that could help Park's efforts to engage North Korea.

"The nuclear test sets back and complicates but does not necessarily doom her engagement efforts over the long term," said Ralph Cossa, president of Pacific Forum CSIS, a Hawaii-based think-tank .

Park warned after the test that North Korea faces international isolation, economic difficulties and, eventually, a collapse if it continues to build its atomic program. She also pressed Pyongyang to respond to her overtures.

"We can't achieve trust with only one side's efforts. Isn't there a saying that 'We need both hands to make a clapping sound?"' she said.