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US on missile watch as North Korea celebrates Kim dynasty

Even as North Korea continues to threaten nuclear action, Pyongyang is decorating the streets, preparing to celebrate Kim Jong Un's first year in power. NBC's Richard Engel reports.

SEOUL -- The United States and South Korea were on high alert for a North Korean missile launch on Thursday as the hermit kingdom turned its attention to celebrating its ruling Kim dynasty and appeared to tone down rhetoric of impending war.

Despite threats it will attack U.S. bases and the South in response to any hostile acts, North Korea started to welcome a stream of visitors for Monday's birthday celebrations of its founding father, Kim Il Sung.

The anniversary of Kim Jong Un's leadership is celebrated in the streets of Pyongyang while the country continues their threat of war with a ballistic missile launch. NBCNews.com's Dara Brown reports.

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

Most observers say Pyongyang has no intention of igniting a conflict that could bring its own destruction but warn of the risks of miscalculation on the highly militarized Korean peninsula.

In London, G8 foreign ministers condemned North Korea's development of nuclear weapons and ballistic missile technology "in the strongest possible terms" in an agreed statement.

There did not appear to be any signs of panic in Seoul, the South Korean capital, and financial markets appeared to shrug off the risk of conflict with stocks posting a third day of gains.

Taiwan appeared to become the first country to warn its citizens against travelling to South Korea after a warning from Pyongyang that foreigners should leave, but hotels were reporting brisk business.

Pyongyang issued a statement that appeared to be tinged with regret over the closure of the joint Kaesong industrial zone that was shuttered when it ordered its workers out this week, terming the North-South Korean venture "the pinnacle of General Kim Jong Il's limitless love for his people and brothers".

Secret filming captures N. Korean smugglers sneaking into China to get supplies for their impoverished country, as a refugee tells of the horror of life under Kim Jong Un. ITN's Angus Walker reports.

The statement on the country's KCNA news agency blamed South Korean President Park Geun-hye for bringing the money-spinning venture to "the brink of shutting down."

Kim Jong Il, Kim Il Sung's son, ruled North Korea until his death in December 2011. He was succeeded by Kim Jong Un, the third of his line to preside over one of the world's poorest and most heavily militarized countries.

Since taking office, the 30-year-old has staged two long-range rocket launches and a nuclear weapons test. The nuclear test in February triggered U.N. sanctions that Pyongyang has termed a hostile act and a precursor to invasion.

For over a month, Pyongyang has issued an almost daily series of threats to the United States and South Korea, most recently warning foreigners to leave the South due to an impending "thermonuclear" war.

The youngest son of Kim Jong Il succeeded his late father in 2011, becoming the third member of his family to rule the unpredictable and reclusive communist state.

Apart from the swipe at South Korea's new president, verbal threats appeared to fall off as KCNA listed arrivals for the upcoming birthday celebrations, naming an eclectic mix ranging from Chinese businessmen to Cold War-era enthusiasts of its socialist monarchy and official ideology of "Juche," or self-reliance.

Reinforcing the rule of the Kim dynasty and the legitimacy of the latest Kim to hold power in Pyongyang is a key tenet of North Korea's ideology.

It was the first anniversary on Thursday of Kim's official ascent to power, although he became de-facto leader immediately after his father's death.

The North's rhetoric has pushed the United States, the guarantor of South Korea's security, to move more military assets into the region in response to the rising threat levels.

In Washington, Defense Secretary Chuck Hagel warned on Wednesday that the North was "skating very close to a dangerous line" with its threats and provocations, and said the United States, currently involved in military exercises with South Korea, was prepared to respond to any moves by Pyongyang.

U.S. Secretary of Defense Chuck Hagel and General Martin Dempsey discuss the situation unfolding on the Korean Peninsula on Wednesday.

"We have every capacity to deal with any action that North Korea would take, to protect this country and the interests of this country and our allies," Hagel told reporters at the Pentagon.

China, the North's only major diplomatic ally, has watched the situation evolving on its doorstep with concern.

"China respects North Korea, but it also holds the responsibility of preserving peace in Northeast Asia," the Global Times, a tabloid published by the ruling Communist Party's People's Daily, said in an editorial.

"Pyongyang should drop its illusions that it can make the world stay silent over its desire for nuclear arms through its hard-line stance and deceptions. We believe the North still has a chance and we regret that it has become mired in this crisis. We hope the crisis is only temporary."

Related:

Who is N. Korea's secretive Kim Jong Un? Here's what we know 

After years of threats, 'positive thinking' keeps S. Koreans going

PhotoBlog: North Koreans celebrate their rulers with song and dance

Full North Korea coverage from NBC News

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