North Korea seen readying missiles

On Tuesday, the United States said it was cracking down on companies involved in North Korea's suspected missile proliferation and in the purchase of equipment that could be used in a nuclear weapons programme.

The U.S. Treasury and State Departments moved to freeze the assets of an Iranian and a North Korean firm under an executive order and also barred U.S. firms from dealing with them.

Philip Goldberg, the U.S. envoy who coordinates sanctions against the North, went to China in a bid to get tough with North Korea. China is the North's biggest benefactor whose cooperation could determine the success of any sanctions regime, analysts said.

He will be in Malaysia on Sunday before heading back to Washington on Monday. It was not immediately clear why he was visiting Malaysia.

A North Korean ship being tracked by the U.S. Navy on suspicion of carrying a banned arms cargo has turned around and is headed in the direction of the North after it was seen sailing to Myanmar.

Officials said the North's military grandstanding is likely related to moves by its leadership to begin readying leader Kim Jong-il's youngest son as a future heir by consolidating the 67-year-old leader's power base.

(Editing by Jon Herskovitz and Valerie Lee)