North Korean leader Kim Jong-Un unveiled Saturday a renovated Korean War museum with a US-baiting centrepiece in the form of the spy ship USS Pueblo, captured in 1968.

Kim, wearing his trademark black Mao suit,cut the red ribbon on the monumental Victorious Fatherland Liberation War Museum after inspecting an honour guard in front of thousands of war veterans and invited foreign guests.

Entering the museum's main doors, the first sight greeting visitors is a four-metre high coloured statue of what looks remarkably like Kim, but turns out to be a youthful representation of his grandfather and the nation's founder Kim Il-Sung.

Much of the museum collection is a paean to Kim Il-Sung's strategic battlefield brilliance — credited with bettering the might of the US military in the Korean War.

The 1950-53 conflict essentially ended with North and South Korea occupying the same territory they held at the start, but the 1953 armistice is celebrated in the North as "Victory Day".

The museum opening coincided with the 60th anniversary of the ceasefire, which was never cemented with a treaty, leaving the two Koreas still technically at war.

Giant statues aside, the main draw of the museum is the USS Pueblo, berthed on the river bank next to the main museum building.

The Pueblo was attacked and seized by North Korea's navy on January 23, 1968. One American sailor was killed in the assault and 82 others were captured and held prisoner for 11 months before they were freed.

US Naval authorities and the crew of the Pueblo insisted that before the capture, the Pueblo was miles outside North Korean territorial waters.

The ship is still listed as a commissioned US naval vessel and a US Senate resolution in 2008 declared the Pueblo was the first US Navy ship to be "hijacked" by a foreign military in more than 150 years.

For North Korea it remains a prized Cold War trophy and proud evidence of its ability to secure victories over its great "US imperialist" foe.

Inside the ship, which has also been renovated, pride of place is given to handwritten confessions signed by some of the ship's officers.

The opening of the refurbished museum was one of a series of "Victory Day" events held in Pyongyang this week, and followed a massive military parade in the capital on Saturday morning.

"This museum is a shrine of victory that will let the whole world know of the heroic fighting spirit and brilliant exploits of our army that defeated the US imperialists for the first time in history," Kim Jong-Un's top military aide Choe Ryong-Hae said in a speech.

The opening ceremony ended in the evening with an extravagant 20-minute firework display.

US, N. Korea both hold key to peace: Chinese state media
Beijing, Beijing Shi (AFP) July 27, 2013 –

The key to lasting peace on the Korean peninsula is "in the hands of the DPRK (North Korea) and the United States", Chinese state media said in a commentary on Saturday.

The Xinhua news agency said commemorations on Saturday to mark the 60th anniversary of the Korean War armistice were "more disturbing than comforting" in a frank assessment from North's closest ally that appeared equally critical of Pyongyang as it was of Washington.

China used to describe its relationship with North Korea as being "as close as lips and teeth" but in recent years China has grown increasingly frustrated with its frequently troublesome nuclear-armed neighbour.

In a commentary to mark the armistice, Xinhua blamed all parties for the continued instability on the peninsula.

"From the frequent war games by the United States and South Korea at the DPRK's doorstep to the repeated nuclear tests and rocket launches by the DPRK, and from the bombardment of Yeonpyeong Island to the shutdown of the Kaesong industrial complex, such incidents have only driven peace further away," the commentary read.

It added: "It is a great pity that today the two Koreas are still commemorating the end of war, instead of celebrating the birth of peace."

In a strongly worded attack on the United States, Xinhua accused Washington of "clinging to Cold War mentality" and said it needed "far more than words" to convince Beijing otherwise.

But it also went on to criticise North Korea. "For Pyongyang's part, its security concerns are understandable and should be addressed properly, but violating UN Security Council resolutions is not helpful. It has to keep its end of the bargain," the state news agency said.

The commentary added: "To a large extent the key is in the hands of the DPRK and the United States, whose mutual antagonism is the root cause of instability on and around the Korean Peninsula."

Although China has become increasingly critical of the North since its third nuclear test in February, Kim Jong-Un was still flanked by Chinese Vice President Li Yuanchao during a massive military parade in Pyongyang on Saturday to mark the armistice's anniversary.

In a separate editorial published Saturday, the Global Times — a state paper known for its nationalist tone — emphasised the importance of the Korean War in China's recent history.

"The Chinese army impressed the US and the world during the Korean War. With scant supplies of food and clothing and largely outgunned by the world's best-equipped army, Chinese soldiers proved their prowess by forcing the US army back to the negotiation table," the paper wrote.

The paper added that some in China were now arguing that the country should "give up on North Korea" while others insist on "standing with this neighbour unconditionally".

"It is better for China to strike a balance between the two," the paper concluded.