The Defense Ministry called for 22.35 trillion won (18.6 billion dollars) in its budget for fiscal 2004, up 28.3 percent from this year's military expenditures.

The 2004 budget includes 8.1 trillion won for the long-term acquisition of new equipment such as missiles, surveillance planes, a military satellite and an Aegis warship and powerful radars.

"The increase in our defense spending reflects our plans to acquire new equipment," a ministry spokesman told AFP, adding the military would relaunch its SAM-X project to buy new US Patriot missiles.

The project to bolster South Korea's defense capabilities against North Korean missiles was suspended in February when South Korean President Roh Moo-Hyun took office, vowing to step up inter-Korean rapprochement.

"We are not free of threats by North Korea's long-range artillery and missiles," Deputy Defense Minister Cha Young-Koo told a radio program Tuesday, suggesting South Korea could buy Patriot missiles.

"Patriot missiles are not the only such missiles in the world but we know they are good ones," he said.

Next year's defense budget accounts for 3.2 percent of South Korea's gross domestic product, other military officials said, up from 2.7 percent this year.

It reflects the increased burden placed on South Korea's defence capabilities by the relocation of US forces away from the inter-Korean border.

To accompany the realignment, Washington has announced it will spend an extra 11 billion dollars over the next four years to boost the combat capability of the 37,000 American troops in South Korea.

North Korea has criticized the additional US spending and on Wednesday complained that US pressure on the Stalinist state since the Iraq war had gone beyond a "danger line".

"A war is neither a sports match nor an amusement game. It is a life-and-death battle," said Rodong Sinmum, North Korea's ruling party mouthpiece.

"If the Bush bellicose forces ignite the second Korean war ... they will know what a real war is like and only death and doom will await the aggressors."

In Phnom Penh, Cambodian officials said North Korea has pulled out of next week's ASEAN Regional Forum. No reason was given for North Korea's withdrawal from the meeting June 16-20.

The North's move comes one day before senior diplomats from the United States, Japan and South Korea are to meet in Hawaii to discuss the eight-month-old nuclear impasse.

Pyongyang has accused Washington of planning a preemptive strike on the isolated country since the crisis flared in October by US revelations that North Korea was engaged in a separate clandestine program based on highly enriched uranium.

On Monday North Korea admitted publicly for the first time that it was seeking nuclear weapons. Washington believes Pyongyang already has one or two nuclear weapons.

The United States has said it was keeping all options open in dealing with North Korea while pushing for a diplomatic settlement.

At a May 14 White House summit, Roh and US President George W. Bush agreed that "further steps" -- widely viewed as economic pressure -- may be needed against North Korea.

Seoul, however, has opposed the idea of sanctions or pre-emptive military strikes to counter the North's nuclear weapons drive.

WAR.WIRE