World governments are viewing the death of North Korean leader Kim Jong Il with wary optimism - a possibly destabilizing moment for the region as power passes to his son but also an opportunity for a new diplomatic start.
South Korea put its military on high alert as it faces North's 1.2 million-strong armed forces, and President Barack Obama agreed by phone with South Korean President Lee Myung-bak to closely monitor developments and cooperate.
President Myung-Bak urged the South Korean people to remain calm while his Cabinet and the parliament convened emergency meetings.
The Defense Ministry said the South Korean military and the 28,500 U.S. troops stationed in South Korea bolstered reconnaissance and were sharing intelligence on North Korea.
The White House said in a statement that it is closely monitoring reports of Kim's death.
Kim Jong Il
"We remain committed to stability on the Korean peninsula, and to the freedom and security of our allies," the statement said.
The Obama administration may postpone decisions on re-engaging the
North in nuclear talks and providing it with food aid, U.S. officials said.
The administration had been expected to decide on both issues this week, possibly as early as Monday, but the officials said Kim's death would likely delay the process. The officials spoke on condition of anonymity due to the sensitivity of the situation. They said the U.S. was particularly concerned about any changes that Kim's death might spark in the military postures of North and South Korea but were hopeful that calm would prevail.
Japanese Prime Minister Yoshihiko Noda held an emergency national security council with top Cabinet members soon after hearing the news.
He "instructed us to be best prepared in case of any unexpected development" while top officials meet to discuss the situation, Chief Cabinet Secretary
Osamu Fujimura told journalists in Tokyo.
Fujimura expressed condolences and said Japan hoped Kim's death would not affect the region adversely.
"First of all we hope that this sudden development would not give adverse impact on the peace and stability of the Korean Peninsula," he said.
The news jolted financial markets, raising the specter of more instability on the divided Korean peninsula as the reclusive regime undergoes a leadership succession.
European stock markets fell slightly in early trading. Wall Street was set to open lower. Broader S&P 500 futures.
South Korea's Kospi index dived nearly 5 percent but later recouped some losses to close 3.4 percent lower. Other Asian stock markets also fell.
Australia's Foreign Minister Kevin Rudd said Kim's death brings the situation to "one of those critical junctures" and "an exceptionally difficult period of transition."
"It is critical that everybody exercises appropriate calm and restraint in what is a important development in terms of the overall stability of the region and the security of us all," Rudd said.
"This presents an opportunity for the North Korean regime, the new leadership of the new regime, to engage fully with the international community on the critical questions of how to feed their people, how to open their economy and, more broadly, how to deal with the long-standing problem of North Korea's nuclear weapons."
In China, a key North Korean ally, Foreign Ministry spokesman Ma Zhaoxu called Kim a "great leader" and said China believes the North Korean people will "turn their grief into strength, unite as one, and continue to advance the cause of North Korean socialism."But he also added that Beijing would continue to offer its support and make "active contributions to peace and stability on the Korean peninsula and in this region."
China has long sought to convince North Korea of the need for economic reform, and Kim's death raises hopes that Pyongyang might now take heed of such advice, said Korea expert Lu Chao at China's Academy of Social Sciences in Liaoning province, which borders North Korea.
"There will definitely be change, good and positive change," Lu said. "North Korea will work more closely with the global community toward the peace and stability of the Korean Peninsula."
China is also expected to take a strong behind-the-scenes role to help retain its influence, which is seen as important no matter which direction North Korea takes, said U.S.¬ Naval Academy China scholar Yu Maochun.
"If North Korea continues to be an international pariah, China will continue to benefit from its current leverage," Yu said. "If North Korea becomes less intransigent and slightly more open, then China will be greatly worried about the possible warming-up, or even reunification, between North and South Koreas."
With so many questions in the air at the moment, however, most countries are waiting to see what comes next.
"The death of a dictator is always a period of uncertainty for a dictatorship," said Swedish Foreign Minister Carl Bildt on Twitter. "And North Korea is the hardest dictatorship in our time."
Kim Jong Il’s death after 17 years as leader was announced Monday by state television two days after he died. North Korea's news agency reported that he had died at 8:30 on Saturday morning after having a heart attack on a train, adding that he had been treated for cardiac and cerebrovascular diseases for a long time. He was 69.
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