WRAPUP 6-U.S. tells N.Korea new missile launch would be "huge mistake"
* Kerry says any North Korea missile launch a "huge mistake"
* Says shrill rhetoric is unacceptable
* Tells China to put "teeth" in policies to rein in North
* North says will never abandon nuclear arms
SEOUL, April 12 (Reuters) - U.S. Secretary of State John Kerry warned North Korea on Friday it would be a "huge mistake" to launch a medium-range missile and said the United States would never accept the reclusive country as a nuclear power.
Addressing reporters after talks with South Korea's president and leaders of the 28,000-strong U.S. military contingent in the country, Kerry also said it was up to China, North Korea's sole major ally, to "put some teeth" in efforts to press Pyongyang to abandon its nuclear ambitions.
Kerry, like other U.S. officials, played down an assessment from the Pentagon's intelligence agency that the North already had a nuclear missile capacity.
The United States, he said, wanted to resume talks about North Korea's earlier pledges to halt its nuclear programme, but would defend its allies in the region if necessary.
North Korea has repeatedly said it will not abandon nuclear weapons which it said on Friday were its "treasured" guarantor of security.
Kerry's visit coincided with preparations for Monday's anniversary of North Korean state founder Kim Il-Sung's birth date, a possible pretext for a show of strength, with speculation focusing on a possible new missile launch.
Kerry, who flies to China on Saturday and to Japan on Sunday, said that if North Korea's 30-year-old leader, Kim Jong-un, proceeded with a launch, "he will be choosing, willfully, to ignore the entire international community".
"I would say ahead of time that it is a huge mistake for him to choose to do that because it will further isolate his country and further isolate his people, who frankly are desperate for food, not missile launches."
The North has issued weeks of shrill threats of an impending war following the imposition of U.N. sanctions in response to its third nuclear test in February. Kerry said the threats were "simply unacceptable" by any standard.
"We are all united in the fact that North Korea will not be accepted as a nuclear power," he said.
Kerry later told U.S. businessmen in Seoul that China, as an advocate of denuclearisation, was in a position to press for a change in the North's policy.
"The reality is that if your policy is denuclearization and it is theirs as it is ours, as it is everybody's except the North at this moment... if that's your policy, you've got to put some teeth into it," he told the gathering.
But North Korea showed little inclination for further talks.
Rodong Sinmun, the mouthpiece of the ruling Workers' Party, said Pyongyang would never abandon its nuclear programme.
"The DPRK will hold tighter the treasured sword, nuclear weapons," it said, referring to the country by its official name, the Democratic People's Republic of Korea.
North Korean state television showed footage of newscasts from other countries depicting the trajectory a North Korean missile launch might take.
It also showed preparations for the Kim Il-Sung birthday festivities, including floral tributes, and a stadium of thousands of schoolchildren of the Korean Children's Union, each wearing a red scarf and saluting and marching in unison.
Speculation has mounted of an impending medium-range missile test launch in the North after reports in South Korea and the United States that as many as five medium-range missiles have been moved into position on the country's east coast.
Officials in both countries believe the North is preparing to test-launch a Musudan missile, whose range of 3,500 km (2,100 miles) or more would put Japan within striking distance and may threaten the island of Guam, which houses U.S. military bases.
The North has been angry about annual military drills between U.S. and South Korean forces, describing them as a "hostile" act. The United States dispatched B52 and B2 stealth bombers from their bases to take part.
Hours before Kerry's arrival, a U.S. lawmaker quoted a report by the U.S. Defense Intelligence Agency, one of the 17 bodies that make up the U.S. intelligence community, as saying it had "moderate confidence" that North Korea had developed a nuclear bomb that could be fitted on a ballistic missile.
But Kerry poured cold water on the report said it was "inaccurate to suggest that the DPRK has fully tested, developed capabilities" as set down in the document.
South Korea's Defence Ministry said it did not believe North Korea could mount a nuclear warhead on a missile.
Asked about the U.S. report, Chinese Foreign Ministry spokesman Hong Lei said Beijing sought "peace and stability on the Korean peninsula and (was) pushing for its denuclearisation via talks and consultations. No matter what changes there are in the situation, we will uphold this direction."
A U.S. official had earlier suggested that Washington's greatest concern was the possibility of unexpected developments linked to Kim Jong-un's "youth and inexperience". Asked if war seemed imminent, he replied: "Not at all."
South Korean President Park Geun-hye, meeting officials from her ruling Saenuri Party before her talks with Kerry, struck a conciliatory note by suggesting Seoul should at least listen to what North Korea had to say.
"We have a lot of issues, including the Kaesong industrial zone," local media quoted her as saying. So should we not meet with them and ask: "Just what are you trying to do?'"
The president was referring to North Korea's closure this week of the jointly run Kaesong industrial park, with the loss of 53,000 jobs. (Additional reporting by Ju-min Park in SEOUL, Sui-Lee Wee in BEIJING, John Ruwitch in SHANGHAI, and Patricia Zengerle, Mark Hosenball and Jeff Mason in WASHINGTON; Writing by Ronald Popeski; Editing by Nick Macfie)