The park, where South Korean businesses employ around 35,000 North Korean workers, is one of the few major sources of foreign currency for North Korea.

Balance of forces



NORTH KOREA


Army: 1.12m troops (plus 4.7 million reserves)
Tanks: c.3,500
Air force: 1,500 aircraft*
Navy: 420 warships

SOUTH KOREA

Army: 587,000 troops (plus 29,000 US troops based in country)
Tanks: 2,330
Air force: 790 aircraft
Navy: 162 warships

Sources: SIPRI, Globalsecurity.org
(*most North Korean aircraft are considered obsolete and possibly unable to fly due to lack of fuel and spare parts.)

It is also the only joint project still in operation after the North tore up a series of agreements in protest at what it sees as the hostile policies of South Korea's conservative president, Lee Myung-bak.

Recent weeks have seen the North stepping up the military rhetoric, warning that Lee's policies are pushing the two countries to the "brink of war".

In the latest statement on Tuesday North Korea's official Rodong Sinmun newspaper warned that the US-South Korean military drills were evidence of intent to wage aggression against the North.

"It is our resolute position and nature to answer the enemy's hardline stance with our extreme hardline stance," the paper said.

On Monday Pyongyang said it had ordered its one-million-strong military to full combat readiness and warned of a "merciless" response if any outside force interferes with what it says is the launch of a communications satellite.

Intelligence agencies believe the rocket launch is being used as a cover for a long-range missile test.

Japan and the US have both said they are considering deploying anti-missile warships which could be used to shoot down the North Korean rocket.