South Korea and U.S. on missile watch as North hails Kim dynasty

South Korea and the United States were on high alert for a North Korean missile test-launch on Thursday, as the isolated state celebrated the rule of the Kim dynasty and appeared to tone down rhetoric of impending war, reported Reuters.

Despite recent threats to attack U.S. bases and the South, North Korea started to welcome a stream of visitors for Monday's celebrations marking the birthday of its founder Kim Il-sung.

North Korea has stationed as many as five medium-range missiles on its east coast, according to defense assessments by Washington and Seoul, possibly in readiness for a test-launch that would demonstrate its ability to hit U.S. bases on Guam.

"There are signs the North could fire off Musudan missiles any time soon," an unnamed intelligence source in Seoul told Yonhap news agency.

Most observers say Pyongyang has no intention of starting a war that would be likely to bring its own destruction but warn of the risks of miscalculation on the highly-militarized Korean peninsula.

There were few signs of alarm in Seoul, the South Korean capital, and financial markets shrugged off the risk of conflict with stocks posting a third day of gains.

New South Korean President Park Geun-hye met foreign businessmen on Thursday and reassured them the country was safe and was working closely with the United States and China, the North's only major diplomatic ally.

Taiwan became the first country to warn its citizens against travelling to South Korea after Pyongyang said foreigners should leave, but Seoul hotels reported brisk business.

Central Asian News Services