Spy satellites have observed North Korea moving a missile into position for a possible launch, with the US saying its forces are on high alert.

Officials have told US media that spy satellites have observed DPRK mobile missile launcher movement, indicating an intermediate-ballistic missile may be being prepared.

The report comes as US Secretary of Defence James Mattis warns any further escalation could rapidly lead to war: "Yes that means for a lot of young troops they’re going to be in a wartime situation."

Pyongyang’s state media has this morning reported President Kim Jong-un as having "praised" his Strategic Force for drawing up a "careful" plan for a "power demonstration" to "envelope" Guam in fire.

"The nuclear force of the DPRK is strong in its guts and no one can guess its muscle as the flight trajectory of medium-to-long ballistic rocket Hwasong-12, firing data and the correct hitting-point are made public at home and abroad."

Kim said he would "watch a little more" Washington’s behaviour, but it will make an "important" decision if the US continues its "extremely dangerous reckless actions".

"The US Imperialists caught the noose around their necks due to their reckless military confrontation racket ... (but) he would watch a little more the foolish and stupid conduct of the Yankees spending a hard time of every minute of their miserable lot," the report says.

Your cookie settings are preventing this third party content from displaying. If you’d like to view this content, please adjust your Cookie Settings . To find out more about how we use cookies, please see our Cookie Guide.

"If the planned fire of our demonstration is carried out as the US is going more reckless, it will be the most delightful historic moment when the Hwasong artillerymen will wring the windpipes of the Yankees and point daggers at their necks."

The missile being prepared may be a Hwasong HS-12. Such intermediate missiles do not have the capacity to reach the mainland United States, but can reach the US military bases of Guam and Japan.

Mattis told reporters in Washington this morning the situation could escalate to war "very quickly".

He said it could be assessed "within moments" if a missile fired from North Korea was on track to hit Guam.

The United States would "take out" any seen to be heading for American soil.

If missiles were fired at US bases: "I think if they fire at the US it could escalate to war very quickly ... Yes, that’s called war, if they shoot at us."

He added: "If they shoot at the United States, I’m assuming they hit the United States. If they do that, it’s game on."

North Korea’s has previously stated its plan is to fire missiles to land in the ocean "near" Guam, not at Guam itself. The US has stated this would be an unacceptable provocation.

Mattis was asked what response the US would give to such a ’near miss’: "You can’t make all those kinds of decisions in advance," he said. "There’s a host of things going on. There’s allies that we consult with ... I need a certain amount of ambiguity on this."

Mattis’s comments came after he and Secretary of State Rex Tillerson wrote in an opinion piece in The Wall Street Journal that America has "no interest" in regime change in Pyongyang or the accelerated reunification of the two Koreas, and stressed the importance of a diplomatic solution to the crisis.

Camera Icon A South Korean man watches a television screen showing U.S. President Donald Trump and North Korean leader Kim Jong Un. Credit: AP Photo/Ahn Young-joon

Today is a public holiday in North Korea (Liberation of the Fatherland Day -- marking the end of World War II). Previous missile launches have been timed to coincide with such calendar events to maximise internal propaganda impact.

Another DPRK statement this morning attacked planned US-South Korea "Freedom Guardian" military drills scheduled for August 21.

"No matter what rhetoric they let out about "annual, regular and defensive drills", they cannot cover up the danger of a war outbreak," the statement says.

"If any accidental case would be sparked, though unwanted, it would never avert a war. What matters is that when a second Korean War breaks out, it would be a nuclear war."