SEOUL- North Korea may this month test a missile designed to fly as far as U.S. territory and may also be gearing up for skirmishes with the South around their disputed sea border, South Korean news reports said on Monday.
Last week, North Korea conducted a nuclear test that put it closer to having a working atomic bomb, test-fired a barrage of short-range missiles and threatened to attack the South, raising tension to one of its highest levels since the 1950-53 Korean War.
In a move that could cause further diplomatic friction, North Korea will put on trial on Thursday two U.S. journalists it arrested on its border with China several months ago and charged with committing hostile acts.
Analysts see Pyongyang's growing belligerence as an attempt to bolster the position of leader Kim Jong-il, whose suspected stroke last August raised questions about his grip on power.
The isolated and impoverished state's actions are also seen as bids to improve its weaponry and put pressure on regional powers to consider giving it money in exchange for disarmament.
North Korea is preparing to launch an intercontinental ballistic missile (ICBM) with an estimated range of 2,500-4,000 miles from a west coast base, the daily JoongAng Ilbo cited South Korean intelligence sources as saying.
Preparations for the launch are likely to be completed in mid-June, one intelligence source said.
Government officials would not confirm the reports.
Train cars carrying a missile left about two weeks ago for a missile base on the North's west coast, the sources said.
Investors said recent developments have raised concern about the threat posed by the North, but they have not had a sustained impact on financial markets and indeed foreign investors have been net buyers of Seoul shares for 12 consecutive sessions.
Ratings Agency Moody' said a rocket launch in April and last month's nuclear test showed the risks posed to the region, but added: We also consider that the stable outlook on South Korea's A2 sovereign ratings remains appropriate.
The main South Korean index has risen by about 9 percent since the rocket launch.
TROUBLES AT SEA
The prickly communist state has threatened to test-fire an ICBM if the U.N. Security Council does not apologize for tightening sanctions after the April rocket launch.
The United States and Japan agreed on Monday they cannot accept a nuclear-armed North Korea, saying they were deeply concerned about recent destabilizing actions by the state.
We absolutely cannot accept that North Korea will have nuclear weapons, Japanese Vice Foreign Minister Mitoji Yabunaka, said after meeting U.S. Deputy Secretary of State Jim Steinberg.
However, U.S. Defense Secretary Robert Gates said during a visit to Manila that Washington was not in a hurry to look for options other than the now-stalled six-party talks on North Korea to get Pyongyang to abandon its nuclear program.
Last week, U.S. officials said Gates had told his South Korea and Japan counterparts that while diplomacy was preferred in dealing with North Korea, other steps may be considered.
Western diplomats said Russia and China have agreed in principle that North Korea should be sanctioned for its nuclear test, but it is not clear what penalties they would back at the United Nations. Both are generally reluctant to back sanctions.
China, the closest that North Korea can claim as a major ally, appears to have temporarily suspended sending delegations to the North in a sign of displeasure over its recent saber rattling, the South's Yonhap news agency quoted unnamed diplomatic sources in Beijing as saying.
April's rocket launch was widely seen as a disguised test of North Korea's long-range Taepodong-2 missile, violating U.N. resolutions banning the country from ballistic missile launches.
That rocket splashed down in the Pacific Ocean after flying some 3,000 km, experts said, indicating the North needed further testing to perfect its ICBM technology. The Alaskan coast is about 4,800 km from North Korea while the U.S. West Coast is at least 8,000 km away.
The launch of what North Korea called a satellite in April failed to show intercontinental capabilities, so they want to show it this time around, said Kim Tae-woo, a weapons expert at the Korea Institute for Defense Analysis.
North Korea has not mastered the technology of miniaturizing a nuclear warhead to mount on a missile, weapons experts say.
In what could set the stage for further provocations, North Korea has declared a wide area of Yellow Sea waters off its west coast off limits until the end of July because it may be preparing for a clash with the South, a report in South Korea's biggest newspaper, the Chosun Ilbo, said.
The two Koreas fought deadly battles in 1999 and 2002 near a Yellow Sea border called the Northern Limit Line, set by U.S.-led U.N. forces at the end of the Korean War.
The North has said the border is invalid and last week warned ships from the South it could not guarantee their safety if they sailed in that area.