North Korea said today it would put on trial two U.S. journalists arrested this month on its border with China, stoking tensions with Washington ahead of a planned rocket launch that has already alarmed the region.

The reclusive state accused the two women reporters, Laura Ling and Euna Lee from the U.S.-based media outlet Current TV, of unspecified "hostile acts".

Pyongyang's announcement comes just days before North Korea plans to put what it says is a satellite into space but which Washington and others say will be a test of a long-range missile that could carry a warhead as far as U.S. territory.

The reporters were arrested two weeks ago by the Tumen River, which runs along the east side of the border between North Korea and China, while working on a story.

"The illegal entry of U.S. reporters into the DPRK (North Korea) and their suspected hostile acts have been confirmed by evidence and their statements, according to the results of intermediary investigation conducted by a competent organ of the DPRK," North Korea's KCNA news agency said.

"The organ is carrying on its investigation and, at the same time, making a preparation for indicting them at a trial on the basis of the already confirmed suspicions."

KCNA said the reporters would be allowed consular access and treated according to international laws. The United States has no diplomatic relations with the North and uses the Swedish embassy in Pyongyang to act as its mediator on such issues.

"We have seen (the report) and are still in the process of working diplomatically ... to achieve a favourable outcome," U.S. State Department spokesman Fred Lash said, declining further comment.

The incident comes amid growing pressure on the North not to launch its Taepodong-2 rocket.

Peter Beck, a Korean affairs specialist at the American University in Washington, said the issue over the reporters could provide a means for Pyongyang and Washington to talk to each other.

Beck said he expected Stephen Bosworth, Washington's envoy for North Korea, to be dispatched in the weeks after the rocket launch to secure the release of the two women.

"After the test and some hand wringing, we (the United States) will grope our way back to table. But we really don't know if the North is serious about negotiating at this point. It looks like they aren't," he said.

North Korea says the rocket launch will be between April 4-8, just before the opening session of its newly elected Supreme People's Assembly, a rubber stamp body that should set out the authoritarian government's policies for the next five years.

The planned launch is certain to feature on the sidelines of the G20 summit this week in London when U.S. President Barack Obama meets global leaders, including President Hu Jintao of China, the nearest the isolated North has to a major ally.

U.S. DEPLOYMENT

The United States, Japan and South Korea are deploying missile-interceptor ships in the area though they say they would shoot down the rocket only if it threatened their territory.

All three argue the launch would break U.N. sanctions. Japan's lower house is expected later in the day to pass a resolution urging North Korea not to fire the rocket.

Pyongyang has threatened to restart a plant that makes arms-grade plutonium if the United Nations does penalise it.

The prickly state already faces a range of U.N. sanctions for previous launches and its nuclear test in 2006, which added to concerns of potential instability in a region that accounts for one sixth of the world's economy.

Analysts say it may not be worried by more sanctions from the launch, which it will see as a way of gaining greater leverage in negotiations with the outside world, which is trying to make it give up attempts to build a nuclear arsenal.

A successful launch -- the first attempt in 2006 failed -- would be a huge boost at home for leader Kim Jong-il and also to his impoverished country's weapons exports, one of its few major sources of income from abroad.

The timing, analysts say, is especially important for the 67-year-old Kim, thought to be in poor health after a suspected stroke last year raised questions over his grip on power in a country which has fallen deeper into poverty and increasingly isolated under his rule.

In a sign of the troubled relations with its neighbours, the North has since Monday been interrogating a South Korean worker at an industrial park just inside its border on suspicion of making derogatory comments about the communist state.

The South Korean Unification Ministry said the man, in his 40s, could be expelled back to the South.

The two Koreas face each other in the soccer field on Wednesday in a World Cup qualifier that is likely to be overshadowed be the rising political tension. The match is crucial for both teams to make it to the finals.