* Embassies appearing to stay put in North Korea
* No sign of tension in South Korea
* Analysts suggest North may start to focus more on economy
By Jane Chung
SEOUL, April 6 Staff at embassies in North Korea
appeared to be remaining in place on Saturday despite an appeal
by authorities in Pyongyang for diplomats to consider leaving
because of heightened tension after weeks of bellicose
North Korean authorities told diplomatic missions they could
not guarantee their safety from next Wednesday - after declaring
that conflict was inevitable amid joint U.S.-South Korean
military exercises due to last until the end of the month.
Whatever the atmosphere in Pyongyang, the rain-soaked South
Korean capital, Seoul, was calm. Traffic moved normally through
the city centre, busy with Saturday shoppers.
South Korea's Yonhap news agency quoted a government
official as saying diplomats were disregarding the suggestion
they might leave the country.
"We don't believe there's any foreign mission about to leave
Pyongyang," the unidentified official was quoted as saying.
"Most foreign governments view the North Korean message as a way
of ratcheting up tension on the Korean peninsula."
North Korea has been angry since new U.N. sanctions were
imposed following its third nuclear weapons test in February.
Its rage has apparently been compounded by joint U.S.-South
Korean military exercises that began on March 1.
China's Xinhua news agency on Friday had quoted the North's
Foreign Ministry as saying the issue was no longer whether but
when a war would break out.
Most countries saw the appeal to the missions as little more
than strident rhetoric after weeks of threatening to launch a
nuclear strike on the United States and declarations of war
against the South.
But Russia said it was "seriously studying" the request.
A South Korean government official expressed bewilderment.
"It's hard to define what is its real intention," said the
official, who asked not to be identified. "But it might have
intensified these threats to strengthen the regime internally or
to respond to the international community."
The United Nations said its humanitarian workers remained
active across North Korea. Secretary General Ban Ki-Moon,
however, remained "deeply concerned" about tensions, heightened
since the imposition of U.N. sanctions against the North for its
third nuclear arms test in February.
Chinese Foreign Minister Wang Yi repeated Beijing's calls
for dialogue to resolve the tensions in a phone call with Ban.
"We oppose provocative words and actions from any party in
the region and do not allow troublemaking on China's doorstep,"
a statement on the ministry's website said, citing Wang.
The appeal to diplomats followed news reports in the South
that North Korea, under its 30-year-old leader Kim Jong-un, had
moved two medium-range missiles to a location on its east coast.
That prompted the White House to say that Washington would "not
be surprised" if the North staged another missile test.
Kim Jong-un is the third member of his dynasty to rule North
Korea. He took over in December 2011 after the death of his
father, Kim Jong-il, who staged confrontations with South Korea
and the United States throughout his 17-year rule.
North Korea has always condemned the exercises held by U.S.
forces and their South Korean allies. But its comments have been
especially vitriolic this year as the United States dispatched
B-2 bombers from its home bases to stage mock runs.
"MADCAP NUCLEAR WAR"
North Korea's government daily newspaper said tension
remained high because the United States was "waging madcap
nuclear war manoeuvres".
"This is aimed at igniting a nuclear war against it through
a pre-emptive strike," the Minju Joson said in a commentary.
"The prevailing situation proves that a new war, a nuclear war,
is imminent on the peninsula."
A television documentary broadcast on Friday quoted North
Korean leader Kim as saying, during a provincial tour last
month, that the country needed to "absolutely guarantee the
quality of our artillery and shells to ensure a rapid
pre-emptive attack on our enemies".
But some commentators examining the outcome of meetings in
Pyongyang last week - of the ruling Workers' Party and of the
rubber-stamp legislature - concluded that Kim and his leadership
were more concerned with economic than military issues.
Internet site 38 North, which specialises in North Korean
affairs, cited the reappointment of reformer Pak Pong Ju as
prime minister, the limited titles given to top military and
security officials and the naming of a woman to a senior party
"These personnel appointments make a great deal of sense in
the context of Pyongyang's declarations ... that its economic
policy will be modified by introducing systemic reforms while
also continuing the development of nuclear weapons," 38 North
commentator Michael Madden wrote.
"(They) appear to be important steps in moving key economic
development products and production away from the control of the
military to the party and government."
North Korea has not shut down one symbol of joint
cooperation, the Kaesong industrial zone just inside its border.
But last week it prevented South Koreans from entering the
complex and about 100 of them who have since remained were due
to return home on Saturday, leaving a further 500 there.
The barrage of North Korean threats has created jitters in
South Korea's financial markets.
Shares slid on Friday, but analysts said much of the decline
was linked to the Bank of Japan's monetary easing policies and
one analyst said further major falls were unlikely.
"In a sense, for now the yen is of greater concern than the
North Korea risk," said Ko Seunghee, a market analyst at SK
Securities. "There is a sense that the KOSPI (index) will not
fall sharply or drop below the 1,900 level unless big news about
North Korea breaks out."