North Korean leader Kim Jong-Un has chaired a high-level meeting that discussed a "great turn" in military capability, state media said Sunday, fuelling expectations of an imminent nuclear test.

Kim made a "historic" speech at the ruling party's Central Military Commission meeting, attended by the heads of the army, the National Defence Commission and the strategic rocket force, the official Korean Central News Agency (KCNA) reported.

The meeting discussed "bringing about a great turn in bolstering military capability", said KCNA, which gave no date for the meeting or details of Kim's speech.

Experts and intelligence sources believe the country has completed preparations for a third nuclear test which it threatened in response to tightened UN sanctions imposed for a long-range rocket launch last December.

Over the past week Pyongyang has issued a series of daily warnings threatening action over the sanctions, including a promise Saturday of the "toughest retaliation".

Several observers in South Korea believe the nuclear test will come before Lunar New Year starts on February 10.

In his "important" speech to the military commission, Kim Jong-Un issued specific guidelines for "defending the security and sovereignty of the country", KCNA said.

It did not elaborate but said participants vowed to "thoroughly implement the military tasks set forth".

The North insists its December rocket launch was a purely scientific mission to put a satellite into orbit.

But the US and its allies, including the South, viewed it as a pretext for a ballistic missile test that violated UN resolutions prompted by the North's rocket launches and nuclear tests in 2006 and 2009.

South Korean President Lee Myung-Bak urged officials to "stand well prepared" for any test after a meeting Sunday with his top security advisers, the South's Yonhap news agency said.

Seoul's chief nuclear envoy Lim Sung-Nam left for Beijing Sunday to meet his Chinese counterpart as part of last-minute diplomatic efforts to dissuade Pyongyang from another atomic test, it said.

China is the isolated North's sole major ally and economic lifeline. It chairs long-stalled six-nation talks on the North's nuclear disarmament, which have been at a standstill since December 2008.

Recent satellite imagery showed unusually busy activity at the northeastern nuclear test site at Punggye-ri. The North has covered the entrance to a tunnel there in an apparent attempt to block satellite monitoring, Yonhap said last week.

On Monday South Korea and its ally the United States will start a joint naval exercise seen largely as a warning to the North.

The three-day drill involving a US nuclear-powered submarine and other warships is expected to be held in the Sea of Japan (East Sea) off the South Korean port city of Pohang.

The North Saturday slammed the drill as "war exercises" aimed at invading the isolated state.

Pyongyang also bestowed a new round of awards and medals on thousands of scientists behind the latest rocket launch, after making more than 100 awards last December.