"The basic defense plan needs a revision" more than 10 years since the end of the Cold War, Koizumi said in an address to more than 300 new graduates of the National Defense Academy in Yokosuka, southwest of Tokyo.

"New threats such as terrorism and ballistic missile attacks have become a major issue to tackle ... We must increase defense capabilities to cope with real situations promptly," he said.

Koizumi's government approved a bill last month to let the country's defense chief order the interception of a missile without first seeking permission from the cabinet.

Self proclaimed nuclear power North Korea shocked the world by firing a missile over Japan into the Pacific Ocean in 1998, calling it a satellite launch. The following year it agreed to a moratorium on long-range missile testing.

Japan is barred from using force to threaten other countries under a constitution imposed by the United States after its World War II defeat.

However its military has recently taken a more active role in international affairs with the deployment of troops in Iraq on a non-combat humanitarian mission, the country's first military deployment since 1945.

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