North Korea kept the world guessing about its satellite on Saturday after the first day of a scheduled five-day launch period passed without a blast-off.
The United States and its regional allies see the exercise as a disguised ballistic missile test by the nuclear-armed North and vow to report it to the UN Security Council.
Nerves were fraying in Japan, which is under the projected flight path.
A government crisis centre announced at 12:16 pm that the rocket was believed launched, but five minutes later retracted its statement as incorrect.
Regional officials in Akita prefecture, which is expected to see a part of the rocket land off its coast, earlier also mistakenly informed thousands that it had gone ahead.
South Korean security ministers ended an emergency meeting chaired by President Lee Myung-Bak at 4:00 pm, a presidential official told AFP.
"The prediction of a launch today had seemed quite plausible but the weather conditions seemingly were not that good at the launch base," an unidentified official told Yonhap news agency.
The communist state last month notified world aviation and shipping agencies it would stage the launch sometime between April 4-8 and between 11:00am and 4:00pm (0200-0700 GMT).
Preparations to launch an "experimental communications satellite" have been completed and it will be launched "soon", the state Korean Central News Agency announced earlier in the day, saying previously stated dates and times were still in effect.
The agency said the satellite would be carried by an Unha-2 (Galaxy-2) rocket -- known in the West as the Taepodong-2, which could theoretically reach Alaska or Hawaii at maximum range.
Seoul experts said the weather at Musudan-ri was cloudy Saturday, with fairly strong winds that would abate Sunday.
The North says it is pursuing its right to a peaceful space programme. Washington, Seoul and Tokyo say firing a rocket for any reason would breach a UN resolution passed after its 2006 missile and nuclear tests.
Pyongyang has said even a debate in the Security Council on the subject would lead to a breakdown of long-running six-nation nuclear disarmament talks.
South Korea, the United States and Japan have all deployed missile-tracking Aegis warships in the Sea of Japan (East Sea) to monitor the flight path.
The North has said the rocket's first stage will fall in the sea 75 kilometres (47 miles) west of Japan and the second stage will plunge into the Pacific.
US President Barack Obama urged Kim Jong-Il's regime to desist.
"We have made very clear to the North Koreans that their missile launch is provocative," he said Friday in Strasbourg.
"Should North Korea decide to take this action, we will work with all interested parties in the international community to take appropriate steps to let North Korea know that it can't threaten the safety and security of other countries with impunity."
Obama's special envoy for North Korea Stephen Bosworth gave an apparently softer message, saying his goal is to resume stalled six-nation nuclear disarmament talks no matter what happens.
Analysts say a successful launch would give the regime a major propaganda boost amid lingering uncertainty over Kim Jong-Il's health, following reports that he suffered a stroke last August.
The launch aims to persuade the new US administration to open direct talks with Pyongyang, and will strengthen the regime's hand in future nuclear negotiations, they say.
The North tested a Taepodong-2 for the first time in July 2006 but it failed after 40 seconds.
South Koreans cancelled trips to Pyongyang on government advice and almost all those already in the North's capital left the country, the unification ministry said.
China is thought likely to block any bid for new UN sanctions.
The Security Council could toughen observance of existing sanctions -- which ban trade in missile components, other weapons and luxury goods -- or issue a chairman's statement criticising Pyongyang.
If North Korea launches, Bosworth told a Washington news conference, the United States would "consult vigorously" on what action to take.
But he added that the aim is to get back to the denuclearisation process as soon as possible after the "dust settles."