(Adds U.S. reaction, paragraphs 7-8) By Jon Herskovitz SEOUL, Feb 3 (Reuters) - North Korea appears to be preparing to test-launch its longest range ballistic missile, media reports said on Tuesday, stoking tensions just days after the reclusive state warned that the Korean Peninsula was on the brink of war. North Korea last week scrapped all agreements with South Korea, a move analysts said was in response to Seoul's tough policies toward Pyongyang as well as designed to grab the attention of U.S. President Barack Obama. [ID:nSEO206792] Financial market analysts in South Korea, used to North Korean sabre rattling, brushed off media reports about the possible test of the Taepodong-2 missile, which is designed to eventually have a range long enough to hit U.S. territory. South Korea's Yonhap news agency and Japan's Sankei Shimbun cited unnamed government sources as saying the North had been moving equipment used in the launch of the Taepodong-2, which it test-fired in July 2006 only to see it destruct a few seconds after leaving the launch pad. A train carrying a large object had left a factory and was headed to the site of a newly constructed launch pad on the North's west coast, Yonhap quoted an unnamed South Korean government source as saying. "The object is suspected as being a Taepodong-2," he said. The United States expressed concern about a possible North Korean missile test and said it would be "provocative." "North Korea's missile activities and missile programs are a concern to the region," State Department spokesman Robert Wood said in Washington. "A ballistic missile launch by North Korea would be unhelpful and frankly provocative." It will take North Korea at least a month or two to actually launch a Taepodong-2, the Sankei cited an unnamed Japanese government source as saying. The North, which tested a nuclear device in 2006, is seen as one of the greatest threats to regional security. But experts say they do not believe it has the technology to miniaturise an atomic weapon so it can be mounted on a missile as a warhead. A security researcher at a South Korean state-run think tank said Pyongyang had two aims in carrying out a missile test. "First, it helps the North to continuously develop and upgrade its long-range missiles. Second, they are seeking to send a political message," said the researcher, who asked not to be named because of the sensitive subject matter. A drawn-out process for any launch could be a way for North Korea, which hates to be ignored, to put a timeframe on when it expects something positive from Seoul or Washington. The North has repeatedly threatened to destroy the conservative government of South Korean President Lee Myung-bak, which ended a decade of free-flowing aid to Pyongyang after taking office a year ago. The previous U.S. administration had also called for a halt to all energy aid to punish North Korea for failing to agree to a system to check claims it made about its atomic programmes. MARKETS UNFAZED Financial analysts in South Korea paid little attention to the media reports. "If they actually launch the missile, it may put pressure on sentiment, but only in the short term," said Hwang Keum-dan, an analyst at Samsung Securities. A South Korean Defence Ministry official said he could not comment on intelligence matters. Japanese government officials declined to comment. Much of the preparation for such a launch can be seen by spy satellites. A team of U.S. experts, including former U.S. ambassador to South Korea Stephen Bosworth, was due to arrive in Pyongyang on Tuesday for talks with North Korean officials. The team is not an official delegation sent by Washington. The North's bureaucracy works slowly to form policy and it may still be trying to figure out its approach to the new Obama team, analysts have said, making it easier for Pyongyang to direct much of its anger toward Seoul. South Korea's Lee and Obama agreed in their first conversation after Obama took office to cooperate on North Korea, the South's presidential Blue House said of a Tuesday phone call. The North has sharpened its rhetoric in recent days just as its leader Kim Jong-il, thought to have suffered a stroke in August, appears to be fully recovered. Kim met a foreign envoy last month for the first time since his suspected illness and a U.S. intelligence source said last week that Kim, who turns 67 on Feb. 16, was firmly in control. (Additional reporting by Jack Kim, Kim Junghyun and Park Jung-youn in Seoul, John Whitesides in Washington and Yoko Kubota in Tokyo; Editing by Dean Yates and Mohammad Zargham) (For a SCENARIOS factbox on possible North Korean military action, click [nSEO348936]) (For a factbox on the North's missile arsenal, click [nSP198538])
Conservative protesters holding posters depicting North Korean leader Kim Jong-il shout during an anti-North Korea rally in Seoul February 3, 2009. North Korea appears to be preparing to test-launch its longest ...
