As succession speculation abounds amid reports of North Korean leader Kim Jong Il's deteriorating health, a recently obtained confidential report has shed new light on a power struggle taking place in the reclusive state.

The report, obtained by Kansai University economics professor Lee Young Hwa, cites Chinese analysts as questioning the loyalty of two veteran generals of the Korean People's Army who are considered to be rivals of Jang Song Taek — Kim's brother-in-law, who was recently named to the powerful National Defense Commission and is widely considered to be the North's second in command.

Gens. Hyon Chol Hae, 75, and Ri Myong Su, 72, have been closely accompanying Kim during his military inspections, and are known to exercise much clout by conveying Kim's orders to the military command. They are also said to be actively promoting Kim's second and third sons, Kim Jong Chol and Kim Jong Un, as heirs to Kim, possibly as a means of self-protection, the report says.

"It was generally believed that Jang Song Taek was steering the nation ever since Kim fell ill, and there was speculation that there also existed a rival faction that worked against him," Lee said. "But now for the first time we can identify who these people are."