"It is highly likely that the North may fire and South Korean and US intelligence authorities are watching closely," the source told Yonhap.
Two US defence officials in Washington told the AFP news agency on Friday that US satellite photos had shown vehicle activity at two sites in North Korea, indicating that a long-range missile test could follow six recent short-range tests.
Arms race fears
Gates warned that Pyongyang's detonation of a nuclear device last Monday could start an arms race in Asia.
"If they continue on a path they are on, I think the consequences for stability in the region are significant and I think it poses the potential, the potential for some kind of an arms race in this region," he said.
Gates offered no specific of what actions the US might take against North Korea, but urged Pyongyang to consider its next moves carefully.
"The choice to continue as a destitute, international pariah, or chart a new course, is North Korea's alone to make," he said. "The world is waiting."
Japan's defence minister told delegates in Singapore that his country would not initiate hostilities with North Korea, but was prepared to defend itself if necessary.
"We have mentioned that North Korea is a threat because of what has happened in the past but unless there are other countries moving to us, we will never start an action as such," Yasukazu Hamada said.
The first of 12 US F-22 fighter jets - also known as Raptors - was deployed to the Kadena air base on the Japanese island of Okinawa on Saturday.
"The deployment underscores the US commitment to Japan as a vital regional partner and signals US resolve to ensure stability and security throughout the Pacific region," the US air force said in a statement.
Meanwhile, a senior Chinese military official urged North Korea to give up its nuclear programme.
"The Korean peninsula should move towards denuclearisation and we hope that all parties concerned will remain cool-headed and take measured measures to address the problem," Lieutenant-General Ma Xiaotian told the Singapore meeting.
Beijing is seen as Pyongyang's closest ally in the region, providing it with aid and effectively propping up the economy.
Gates' fears of an arms race in Asia were echoed by Hans Blix, the former head of the UN weapons inspection team in Iraq.
"If North Korea continues on this line it can provoke hardliners in Japan to say they need a nuclear weapon," he told Al Jazeera on Friday.
"If they were to go in that direction then the whole temperature in the far east would change and relations with China would be difficult."
Blix warned that the "other major risk" is the possibility that North Korea could export its knowledge of nuclear weapons to other countries.
|Gates said that North Korea's nuclear test could precipitate an arms race [EPA]
"We have seen how they exported their missile capability, and there are suspicions that they were helping Syria to build a nuclear research reactor," he said.
Tensions have risen in the region as Pyongyang has stepped up its rhetoric and declared the armistice which ended the war with the South in 1953 to be over and threatened "self-defence measures" if the UN imposes new sanctions.
Seoul encouraged the security council to take action against Pyongyang.
"We urge the United Nations Security Council and international community to take active measures against North Korea's wrongdoings," Lee Sang Hee, South Korea's defence minister, said on Saturday.
The UN Security Council is still to respond to the tests, but on Thursday it circulated a draft resolution condemning North Korea and urged member states to enforce previously approved sanctions against Pyongyang.
"The key will be implementing that resolution," Mark Fitzpatrick, senior fellow at the institute of strategic studies, told Al Jazeera.
"Whether that resolution calls for freezing North Korean bank accounts, or inspecting North Korean cargo, or for other sanctions."