North Korea readies missile

SEOUL (Reuters) - North Korea has put a long-range missile in place for a launch the United States warned would violate U.N. sanctions imposed on the reclusive state for past weapons tests.

South Korea said on Thursday the launch would be a serious challenge to security in north Asia, which accounts for one sixth of the global economy. Japan urged North Korea to refrain from action that would destabilise the region.

The planned launch, seen by some regional powers as a disguised military exercise, is the first big test for U.S. President Barack Obama in dealing with the prickly North, whose efforts to build a nuclear arsenal have long plagued ties with Washington.

The South Korean daily Chosun Ilbo quoted a diplomatic source as saying the North could technically fire the missile, which has the range to hit U.S. territory, by the weekend.

This is earlier than the April 4-8 timeframe Pyongyang announced for what it says is the launch of a communications satellite.

"Technically a launch is possible within three to four days," the Chosun Ilbo quoted a diplomatic source in Seoul as saying.

On Wednesday, a U.S. counter-proliferation official told Reuters that North Korea appeared to have positioned the rocket on its launch pad.

The U.S. has spy satellites trained on the Taepodong-2 launch pad at North Korea's east coast Musudan-ri missile base.

Another U.S. official, also speaking on condition of anonymity, said North Korea had placed together two stages of what is expected to be a three-stage rocket.

Once it has been positioned, North Korea will need several days to fuel the rocket which could, in theory, carry a warhead as far as Alaska. The only previous test of the rocket in 2006 ended in failure when it blew apart seconds after lift-off.

GROWING TENSION

"We strongly urge the North to immediately stop the launch of a long-range missile, which would be a clear violation of the U.N. Security Council resolution 1718," South Korean Defence Ministry spokesman Won Tae-jae told reporters, calling the move a serious challenge to regional security and an act of aggression.

South Korea plans to dispatch an advanced destroyer capable of tracking and shooting down missiles to waters off the east coast, Yonhap news agency quoted government sources as saying.

The planned launch and growing tension on the Korean peninsula are beginning to worry financial markets in the South, although so far there has been only minor impact.

"If they really fire something, it would definitely shake the financial markets, but only briefly, as has been the case in many previous cases of provocation and clashes," said Jung Sung-min, a fixed-income analyst at Eugene Futures.

U.S. Secretary of State Hillary Clinton, during a visit to Mexico, said the launch would deal a blow to six-party international talks to end Pyongyang's nuclear weapons programme.

Those talks sputtered to a halt in December over disagreement on how to check the North was disabling its nuclear facilities.

"This provocative action ... will not go unnoticed and there will be consequences," she told reporters, repeating earlier warnings it could put the issue before the U.N. Security Council for additional sanctions.

CHINA TO BLOCK MORE SANCTIONS?

North Korea already faces a range of U.N. sanctions, some linked to its first nuclear test in 2006, and many analysts doubt new ones would get past China -- the nearest Pyongyang has to a powerful ally -- in the Security Council.

China, sticking to its low-key approach, said it hoped all "relevant parties will remain restrained and calm."

Russian Foreign Minister Sergei Lavrov cautioned the international community against making rash decisions.

"I consider it important not to make hasty conclusions ... Do not try to make evaluations before events have occurred," he said in Moscow, while noting U.N. Security Council resolutions should be adhered to.

Japanese Prime Minister Taro Aso urged North Korea to refrain from action "that will hurt peace and stability in the region."

A successful launch this time would prove a huge boost at home to leader Kim Jong-il, whose illness last year -- widely thought to have been a stroke -- has raised questions over his grip on power.

A recent photograph in North Korean media showed the normally portly Kim to have lost a lot of weight and looking frail.

"A successful launch, coupled with international recognition of its nuclear capabilities, would also help secure the survival of the regime," said Koh Yu-hwan, Dongguk University professor of North Korea studies in Seoul.

North Korea has given international agencies notice of the rocket's planned trajectory that would take it over Japan, dropping booster stages to its east and west.

The U.S. military has said it could with "high probability" intercept any North Korean missile heading for U.S. territory, if ordered to do so. Pyongyang says any attempt to shoot down the rocket would be an act of war.

(Additional reporting by Randall Mikkelsen and Paul Eckert in WASHINGTON, Arshad Mohammed in MEXICO CITY, and Jack Kim, Park Jung-youn, Yoo Choonsik and Seo Eun-kyung in SEOUL; Editing by Dean Yates)