SEOUL - North Korean leader Kim Jong-il is likely in good health and his grip on power strong but he appears to have needed displays of military might to counter a rise in domestic unrest, a South Korean cabinet minister said on Monday.

Social instability has increased in North Korea. So Kim Jong-il needs to continue to reinforce his domestic power base, Unification Minister Hyun In-taek told Reuters in an interview.

Kim suffered a suspected stroke last August, and in its aftermath North Korea ratcheted up regional tension with bellicose language, a rocket launch widely seen as a disguised missile test and an underground nuclear explosion.

The saber-rattling has been linked to Kim's need to consolidate his power and secure the eventual succession of his youngest son, Kim Jong-un, diplomats and officials say.

Hyun said Kim had recovered sufficiently from illness to resume an active schedule. The frequency of his trips through the country has sharply increased compared to last year, he added.

We think that at this point, Kim Jong-il's health is enough to conduct a normal state of activities to govern the country, Hyun said in an interview at his office in central Seoul.

He has to think about possible power succession, whether it happens right away or some time later, said Hyun, adding he could not confirm that the North Korean leader's third son was his chosen successor.

In April, 67-year-old Kim reshuffled the powerful National Defense Commission, which he heads, to consolidate his grip by adding to its ranks key loyalist generals and his brother-in-law. This brought to the fore figures sympathetic to the rise of his son, analysts suggest.

Kim Jong-il's power base is even stronger (now), Hyun said.

INSTABILITY

Kim's military gestures stoke international antagonism that serves as a distraction at home from social discontent sharpened by economic decline, Hyun suggested.

One simple and clear evidence (of discontent) is that there are a lot more defectors going from North Korea to China, said Hyun. He did not make clear when the increase took place.

In recent years fears of social instability had led the authorities in the dirt-poor North to clamp down on street markets that previously offered a degree of economic freedom, said Hyun. Income levels in the North are a twentieth of those in South Korea.

Hyun is the architect of South Korean President Lee Myung-bak's hardline policy on its neighbor, having called on the North to abandon its nuclear arms ambitions and open up to the international community in return for massive economic aid.

North Korea conducted its second nuclear test on May 25, triggering a U.N. Security Council resolution adopting tough sanctions aimed at cutting off the North's lucrative arms trade.

Pyongyang has threatened to fire an intercontinental ballistic missile if the U.N. Security Council did not apologize for punishing it for its April long-range rocket launch.

Hyun said the communist North had a history of living up to its word and expected it to fulfill its threat to launch a long-range missile in the coming weeks.

U.S. President Barack Obama and President Lee last week pledged not to repeat the mistake of rewarding Pyongyang's provocative actions with dialogue, and vowed U.N. sanctions would be strictly enforced.

Hyun pressed China, the closest Pyongyang has to a major ally, to enforce the sanctions on the North's arms trade and prove to the North's leaders that brinkmanship tactics were no longer effective.

If the Chinese think about what North Korea's nuclear capability means to Northeast Asia and to peace and security of the world, they will cooperate with the international community in a rational way.

Hyun also said South Korea was willing to continue talks with the North to salvage a troubled joint industrial project in the North despite Pyongyang's inappropriate demands for higher wages for its workers and land lease.

(Additional reporting by Jonathan Thatcher, Editing by Dean Yates)

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