South Korea slammed North Korea's nuclear test as an "intolerable provocation" and ordered its 680 000-strong military on heightened alert.

The test "is a serious threat to peace and stability on the Korean peninsula and in Northeast Asia, as well as a grave challenge to the international non-proliferation regime," said presidential spokesman Lee Dong-Kwan.

"This is an intolerable provocation that ignores the inter-Korean accord on denuclearisation and a six-party talks agreement, as well as clearly violating UN Security Council resolution 1718."

Some 200 activists burnt portraits of North Korean leader Kim Jong-Il and his country's flag in downtown Seoul and urged the international community to punish their communist neighbour.

The North said its "successful" underground test was more powerful than its previous one in October 2006, which led the Security Council to pass a sanctions resolution.

The stock market plunged more than six percent at one point in the morning but closed virtually unchanged.

"We've learnt a lesson from 2006 that the impact was short-lived and the market recovered fast back then," SK Securities' Choi Seong-Lak told Dow Jones Newswires.

The two countries have remained technically at war since the 1950-53 conflict and South Koreans have grown accustomed to cross-border threats.

Closely monitoring troops

However, a spokesman for the Joint Chiefs of Staff in Seoul said troops were put on heightened alert "and are closely monitoring movement of North Korean troops."

The North informed China and the United States in advance of its test, a senior Seoul government official told reporters on condition of anonymity.

"It's so disappointing," President Lee Myung-Bak told a National Security Council meeting, adding the government would handle the situation calmly while maintaining tight security.

South Korea is a member of six-party talks which also group North Korea, China, Japan, Russia and the United States.

The forum has since 2003 been trying to persuade the North to scrap its nuclear programme in return for energy aid and diplomatic benefits.

The presidential spokesman said Seoul, in close cooperation with other members of the six-party talks, would "ask the UN Security Council to take appropriate action."

The council was to meet later Monday, Japan's UN mission and Russian Foreign Minister Sergei Lavrov said.

Asked about media reports the North also tested a short-range missile on Monday, the spokesman said: "I believe it was confirmed as a fact."

His office later retracted the comment, saying the report was still being verified.

Defence Minister Lee Sang-Hee cancelled a scheduled three-day trip to China.

The minister had been scheduled to leave for Beijing Tuesday before flying to Singapore to attend a regional security forum there and hold talks with US Secretary of Defence Robert Gates.

"The minister will also cancel his trip to Singapore if cross-border tension rises," a ministry spokesman said.