South Korean President Moon Jae-in has said there is a "high possibility" of war with North Korea, as he warned its recent missile launch is a serious threat to global peace.

"The reality is that there is a high possibility of a military conflict at the NLL (Northern Limit Line) and military demarcation line," Moon was quoted as saying by the presidential Blue House.

"We will sternly deal with the North, together with the international community," Mr Moon said during a visit to the Defence Ministry in Seoul, Younhap News Agency reported.

He also said the the country's military was ready and capable of striking back should the North attack.

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"North Korea launched a missile four days ago and claims to have succeeded in launching an intermediate-range ballistic missile," Mr Moon said.

"Launching ballistic missiles is a serious provocation that violates UN Security Council resolutions, as well as being a serious challenge to global peace and stability. We will never tolerate such North Korean provocations and nuclear threats," he added.

Mr Moon's comments came hours after the South, which hosts 28,500 US troops, said it wanted to reopen a channel of dialogue with North Korea as the South Korean president seeks a two-track policy involving sanctions and dialogue to try to rein in its neighbour.

South Korean Unification Ministry spokesman Lee Duk-haeng told reporters the government's most basic stance is that communication lines between South and North Korea should reopen.

"The Unification Ministry has considered options on this internally but nothing has been decided yet," said Lee.

In pictures: North Korea military drill Show all 8 1 /8 In pictures: North Korea military drill In pictures: North Korea military drill North Korea's leader Kim Jong Un watches a military drill marking the 85th anniversary of the establishment of the Korean People's Army (KPA) KCNA/Handout via REUTERS In pictures: North Korea military drill A military drill marking the 85th anniversary of the establishment of the Korean People's Army (KPA) is seen in this handout photo by North Korea's Korean Central News Agency (KCNA) KCNA/Handout via REUTERS In pictures: North Korea military drill A military drill marking the 85th anniversary of the establishment of the Korean People's Army (KPA) is seen in this handout photo by North Korea's Korean Central News Agency (KCNA) KCNA/Handout via REUTERS In pictures: North Korea military drill A military drill marking the 85th anniversary of the establishment of the Korean People's Army (KPA) KCNA/Handout via REUTERS In pictures: North Korea military drill A military drill marking the 85th anniversary of the establishment of the Korean People's Army (KPA) KCNA/Handout via REUTERS In pictures: North Korea military drill This image made from video of still images broadcast in a news bulletin by North Korea's KRT, shows what was said to be a 'Combined Fire Demonstration' held to celebrate the 85th anniversary of the North Korean army, in Wonsan, North Korea. KRT via AP Video In pictures: North Korea military drill This image made from video of still images broadcast in a news bulletin by North Korea's KRT, shows what was said to be a 'Combined Fire Demonstration' held to celebrate the 85th anniversary of the North Korean army, in Wonsan, North Korea. KRT via AP Video In pictures: North Korea military drill This image made from video of still images broadcast in a news bulletin by North Korea's KRT, shows what was said to be a 'Combined Fire Demonstration' held to celebrate the 85th anniversary of the North Korean army, in Wonsan, North Korea. KRT via AP Video

North Korea has made no secret of the fact that it is working to develop a nuclear-tipped missile capable of striking the US mainland and has ignored calls to rein in its nuclear and missile programmes, even from China, its lone major ally.

The reclusive state claimed to have successfully conducted a missile test proving it has the capacity to carry a "large scale nuclear warhead".