Moscow summoned North Korea's ambassador to explain the U.S. reports which say Pyongyang has prepared a missile for launch, while China urged North Korea and Washington to find a breakthrough in talks over North Korea's missile programme.

"It was stressed that any steps that could negatively impact regional stability and complicate the quest for a way to settle the nuclear problem on the Korean peninsula were undesirable," Russia's foreign ministry said in a statement.

China appealed for calm on Thursday and said North Korea's claim to have a sovereign right to test its missiles, and U.S. criticism that a test would violate existing agreements, were making the problem difficult to resolve.

Chinese Vice Foreign Minister Wu Dawei said Beijing hoped the parties would resolve the problem through negotiations.

North Korea said on Wednesday it wanted new direct talks with the United States. Washington rejected the proposal and demanded Pyongyang return to stalled multilateral talks aimed at persuading the North to abandon its nuclear arms programme in return for aid and security promises.

U.S. ambassador to the United Nations John Bolton said on Thursday Washington was committed to a diplomatic solution and ready for negotiations.

"We're having consultations here in New York with other members of the Security Council and other members of the U.N.," Bolton said. "But ... the most important priority, is to try and persuade North Korea not to launch at all."

BRINKMANSHIP

The United States has been saying for about a week there is evidence North Korea may test-fire its Taepodong-2 missile and on Thursday Japan's defence minister said Tokyo had mobilised naval vessels and aircraft to gather information.

But in an interview with CNN, U.S. Vice President Dick Cheney seemed to downplay the threat from North Korea's missile programme, saying Pyongyang's missile capabililties were "fairly rudimentary".

Cheney, according to a transcript of the CNN interview, said North Korea seems to have improved the range of its missiles but suggested the programme still lacked sophistication.

Anxiety over the standoff spooked financial markets, pushing the yen down against the dollar on a rumour -- later denied -- that a U.S. military plane had crashed in the North.

Spokesmen for U.S. forces in Japan and South Korea as well as for the South Korean and Japanese military said they had not heard of any plane crash.

The rumour emerged after Pyongyang's KCNA news agency warned that chances of an aerial conflict with the United States had grown because of U.S. spy flights over the secretive state.

"The U.S. imperialist warmongers have been intensifying military provocations against the DPRK (North Korea) of late," KCNA said in a report. "The ceaseless illegal intrusion of the planes has created a grave danger of military conflict in the air above the region."

Pentagon officials have declined to say if they would try to shoot down any North Korean missile, but other U.S. officials have said that is unlikely as the launch is probably aimed at the open sea.

Six-party talks on North Korea's nuclear programme, joining the two Koreas, the United States, Japan, China and Russia, have been stalled since November.