North Korea said its second attempt to put a spy satellite into orbit failed on Thursday, three months after the first one crashed into the ocean shortly after launch.

Leader Kim Jong Un has made the development of a military eye in the sky a top priority, with his nuclear-armed country claiming it is a necessary counterbalance to growing regional activity by US forces.

The National Aerospace Development Administration (NADA) "conducted the second launch of reconnaissance satellite Malligyong-1" on Thursday, the official Korean Central News Agency said.

"The launch failed due to an error in the emergency blasting system during the third-stage flight," NADA said, adding that the problem was "not a big issue" and that it would attempt another launch in October.

The South Korean military said it detected the launch of the purported space rocket at around 3:50 am (1850 GMT Wednesday) and that it flew over the Yellow Sea. It added that a search and retrieval operation for the wreckage had begun.

South Korea's National Security Council slammed the Thursday launch and North Korea's earlier attempt in May, saying Pyongyang was "squandering scarce resources on reckless provocations while blaming lower officials for the economic situation that is driving its people to starvation and death".

North Korea had notified Japan's coast guard that a satellite launch would take place between August 24 and 31, prompting Tokyo to mobilise ships and its PAC-3 missile defence system.

The launch was first signalled by the Japanese government, which called it "extremely problematic" and issued a brief warning to residents of the southern Okinawa region to take cover.

"Behaviour like this goes against the UN resolutions and we're already firmly protesting," Japanese Prime Minister Fumio Kishida said.

Kishida added that in light of the recent trilateral Camp David summit, Washington, Tokyo and Seoul "will closely coordinate more than ever" in response.

North Korea is banned under multiple UN resolutions from testing ballistic technology, which is used for both missiles and space rockets.

The launch "risks destabilising the security situation in the region and beyond," US National Security Council spokeswoman Adrienne Watson said.

- Drills, strikes -

The launch comes shortly after Washington and Seoul kicked off major joint military drills on Monday.

Known as Ulchi Freedom Shield, the annual exercises, which always infuriate Pyongyang and have already been targeted by North Korean hackers, will run through August 31.

Relations between the two Koreas are at their lowest point in years, and diplomacy is stalled after failed attempts to discuss Pyongyang's denuclearisation.

Kim has declared North Korea an "irreversible" nuclear power and has called for ramped-up arms production, including of tactical nuclear weapons.

Successfully putting a spy satellite into orbit would significantly improve North Korea's intelligence gathering abilities, Lami Kim, a professor at the Daniel K. Inouye Asia-Pacific Center for Security Studies, told AFP.

"Kim Jong Un has said that they are critical for preemptive strikes -- recall that North Korea's new nuclear law passed last year enshrined the right to use nuclear weapons preemptively," he said.

If North Korea does succeed in October, it will "intensify an arms race between the two Koreas".

- 'Space is hard' -

In May, Pyongyang launched what it described as its first military reconnaissance satellite, but the rocket -- named "Chollima-1" after a mythical horse that often features in official propaganda -- plunged into the sea minutes after liftoff.

The crash sparked a complex, 36-day salvage operation in which South Korea retrieved parts of the rocket and satellite for analysis, later saying they had no military utility.

The latest launch, though a failure, showed signs of improvement, Joseph Dempsey, a researcher at the International Institute for Strategic Studies, told AFP. "Space is hard," he added.

Jeffrey Lewis, a non-proliferation expert at the Middlebury Institute of International Studies, said that the third stage was "a common failure point".

"Many of the early US Redstone rockets failed," he said, referring to launchers used in the early years of the space age. "Eventually, they figured it out, and so will North Korea."