North Korea announced the death of supreme leader Kim Jong Il and urged its people to rally behind his young son and heir-apparent on Monday, while the world watched warily for signs of instability in a nation pursuing nuclear weapons.

South Korea, anxious about the untested, 20-something Kim Jong Un after his father's 17-year rule, put its military on high alert against the North's 1.2 million-strong armed forces. President Barack Obama agreed by phone with South Korean President Lee Myung-bak to closely monitor developments.

In Seoul, parliamentary official Lee Kyu-yun said he was thinking of stocking up food in case of soaring military tensions.

Lee Byung-joon, 27, feared South Korea might have to fight a war against the North if high-ranking officials challenge the inexperienced Kim Jong Un and Pyongyang becomes unstable.

"I definitely think the chance of war breaking out between the South and the North is higher now than before," Lee said.

People on the streets of the North Korean capital, Pyongyang, wailed in grief, some kneeling on the ground or bowing repeatedly as they learned the news that their 'dear general' had died of heart failure on Saturday at age 69 while carrying out official duties on a train trip.

"How could the heavens be so cruel? Please come back, general. We cannot believe you're gone," Hong Son Ok shouted in an interview with North Korea's official television, her body shaking wildly.

"He passed away too suddenly to our profound regret," said a statement carried by the North's official Korean Central News Agency. "The heart of Kim Jong Il stopped beating, but his noble and august name and benevolent image will always be remembered by our army and people."

While there was no immediate statement on official succession, indications were clear that Kim Jong Un, the third son of Kim Jong Il, would be in charge.

The North said in a dispatch that the people and the military 'have pledged to uphold the leadership of comrade Kim Jong Un' and called him a 'great successor' of the country's revolutionary philosophy of juche, or self reliance.

The death could set back efforts by the United States and others to get Pyongyang to abandon its nuclear weapons ambitions, because the untested successor may seek to avoid any perceived weakness as he moves to consolidate control.

"The situation could become extremely volatile. What the North Korean military does in the next 24-48 hours will be decisive," said Bill Richardson, a former U.S. ambassador to the United Nations who has made several high-profile visits to North Korea.

The death comes at a sensitive time for North Korea as it prepares for next year's 100th anniversary of the birth of founder Kim Il Sung - Kim Jong Il's father. The preparations include massive construction projects throughout the city as part of Kim Jong Il's unfulfilled promise to bring prosperity to his people.

Seoul and Washington will worry that Kim Jong Un 'may feel it necessary in the future to precipitate a crisis to prove his mettle to other senior leaders', according to Bruce Klingner, an Asia analyst at The Heritage Foundation think tank in Washington.

Some analysts, however, said Kim's death was unlikely to plunge the country into chaos because it already was preparing for a transition. Kim Jong Il indicated a year ago that Kim Jong Un would be his successor, putting him in high-ranking posts.

"There won't be any emergencies in the North at least in the next few months," said Baek Seung-joo of the state-run Korea Institute for Defense Analyses in South Korea.

Another analyst said an internal power struggle could break out between Kim Jong Un and his aunt's husband, Jang Song Thaek, who was elevated in the government last year and likely will be given a caretaker role in the new administration

"Tension will arise between Jang and Kim Jong Un, because Kim will have no choice but to share some power with Jang," said Ryoo Kihl-jae, a professor at the University of North Korean Studies, which is in South Korea.

The North said it would place Kim's body in the Kumsusan memorial palace in Pyongyang and that his funeral would be on December 28. No entertainment will be allowed during a 10-day mourning period, and the country will accept no 'foreign delegations hoping to express condolences', it said.

South Korea's President Lee urged his 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. Lee also talked with the leaders of Japan and Russia.

The White House said in a statement that it is closely monitoring reports of Kim's death. "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.

In a 'special broadcast' on Monday from the North Korean capital, state media said Kim died on a train due to a 'great mental and physical strain' during a 'high intensity field inspection'. It said an autopsy was done on December 18 and 'fully confirmed' the diagnosis.

Kim is believed to have suffered a stroke in 2008, but he had appeared relatively vigorous in photos and video from recent trips to China and Russia and in numerous trips around the country carefully documented by state media.

"It is the biggest loss for the party ... and it is our people and nation's biggest sadness," an anchorwoman clad in black Korean traditional dress said in a voice choked with tears.

Chae Jae-eun, a South Korean company worker, said from Seoul that she worried mostly about the economic implications of Kim Jong Il's death.

Asian stock markets moved lower following the news.

A group of North Koreans waiting at Beijing airport for their flight to Pyongyang reacted with shock when asked of Kim's death. One woman broke into tears as she pulled out a handkerchief. One of her companions led her away when she looked as if she would collapse.