REUTERS - North Korea appears to be preparing to test-launch its longest range ballistic missile, media reports said on Tuesday, stoking tensions just days after the reclusive state warned that the Korean peninsula was on the brink of war.

North Korea last week scrapped all agreements with South Korea, a move analysts said was in response to Seoul's tough policies toward Pyongyang as well as designed to grab the attention of U.S. President Barack Obama.

Financial market analysts in South Korea, used to North Korean sabre rattling, brushed off media reports about the possible test of the Taepodong-2 missile, which is designed to eventually have a range long enough to hit U.S. territory.

South Korea's Yonhap news agency and Japan's Sankei Shimbun cited unnamed government sources as saying the North had been moving equipment used in the launch of the Taepodong-2, which it test-fired in July 2006 only to see it destruct a few seconds after leaving the launch pad.

A train carrying a large object had left a factory and was headed to the site of a newly constructed launch pad on the North's west coast, Yonhap quoted an unnamed South Korean government source as saying.

"The object is suspected as being a Taepodong-2," he said.

It will take North Korea at least a month or two to actually launch a Taepodong-2, the Sankei cited an unnamed Japanese government source as saying.

The North, which tested a nuclear device in 2006, is seen as one of the greatest threats to regional security. But experts say they do not believe it has the technology to miniaturise an atomic weapon so it can be mounted on a missile.(