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The launch of the missile at 02.30 GMT (11.30am local time) from a coastal site in the country’s northeast presents US President Barack Obama with his first major foreign policy test since he took office in January, analysts say.
It came after weeks of escalating tensions in which North Korean has threatened to pull out permanently from the stalled Six-Party nuclear disarmament talks if any country attempted to interfere with its missile test.
Military analysts were still trying to assess the success of the launch from radar telemetry data as the US, Japan and South Korea all condemned the launch as a threat to international peace and stability.
Four hours after launch North Korea declared the test a success, claiming a satellite reached orbit within nine minutes and has started to transmit revoloutionary songs down to earth. A state media report described the launch as a "proud achievement made out of our battle to upgrade our country's space scientific technology."
The United States immediately announced it would take steps to show the regime of Kim Jong-il know that it could not threatened the security of other nations with impunity.
U.S. President Barack Obama said in a statement that North Korea, which tested a nuclear device in 2006, had violated U.N. resolutions and increased its own isolation.
"With this provocative act, North Korea has ignored its international obligations, rejected unequivocal calls for restraint, and further isolated itself from the community of nations," said Mr Obama.
Yu Myung-Hwan, foreign minister of South Korea called the launch a “reckless” act. “Regardless of any North Korean claims, this is provocative activity which threatens stability and peace on the Korean peninsula and in Northeast Asia,” he added.
Japan, which last week had threatened to intercept the missile if it fell towards Japanese territory also condemned the launch as a provocative action.
“It is extremely regrettable that North Korea went ahead with the launch ... and we protest strongly,” said Japan's Chief Cabinet Secretary Takeo Kawamura.
However despite having international opprobrium heaped upon it, analysts said the launch will be seen as a major propaganda coup for Kim Jong-il’s regime which draws its strength at home from defying international opinion.
If successful in deploying a satellite into space, the launch will also mean that the North has beaten its arch-enemy in the South which is planning its first satellite launch later this year.
Analysts added that the US and other nations would have to tread a fine line between ‘punishing’ the North for its irresponsible actions and driving it further into international isolation and a possible resumption of uranium enrichment for its nuclear weapons programme.
The UN Security Council will meet in New York later today to discuss the launch, but diplomats have hinted that fresh sanctions against the North are unlikely as they would be opposed by China and Russia as counterproductive.
More likely are discussions on how to apply existing sanctions more thoroughly, the unnamed added.
Analysts also say that the response to Pyongyang’s decision to ignore pleas not to launch the missile would also be a test of China’s willingness to support international nuclear non-proliferation efforts.
China remained quiet after the launch, although the official Xinhua news agency quoted its South Korean counterpart Yonhap as saying that North Korea's rocket carried a satellite, which would counter suspicions the launch was actually a disguised missile test.
The launch took place on the second of the five days that Pyongyang had announced it would test the missile, after unfavourable weather conditions prevented a launch yesterday.
Initial reports said that the first booster rocket of the three-stage Taepodong-2 missile had dropped into the Sea of Japan 170 miles of the north Japanese coast. The only previous Taepodong-2 test, in July 2006 ended in failure after the missile blew apart 40 seconds after lift-off.
A united diplomatic response to the test is also made more difficult by legal disputes over whether a 2006 UN resolution banning the North from ballistic missile testing would cover a satellite test.
The US, Japan and South Korea have said that the test is a ‘cover’ for developing ballistic missile technology that could in theory deliver a nuclear warhead as far as Alaska or Hawaii.
Despite international appeals, North Korea has gone ahead with a long publicised rocket launch. Authorities from the United States, Japan, and South Korea confirm that the rocket lifted off at 11.32 local time (02.32 GMT) on Sunday April 5, 2009.

"A short time ago a flying object appeared to have been launched from North Korea," read a statement by the Japanese government. The rocket seems to have passed over the Japanese capital of Tokyo and headed over the Pacific Ocean. Two parts of the rocket, the first and second stages, fell either side of the Japanese home islands, falling into the Sea of Japan and the Pacific.

A statement by the North Korean official news agency said that the rocket had successfully launched a satellite which is now broadcasting "data" and North Korean propaganda songs. A South Korean source told the South Korean Yonhap news agency that the rocket did appear to be carrying a satellite. The North Korean statement calls the rocket Unha-2 ("Galaxy-2") and the satellite Kwangmyŏngsŏng-2 ("Lodestar 2").

However, the US Northern Command stated that the launch of the rocket failed, and that the payload and second stage have fallen into the Pacific Ocean.

President Obama of the United States condemned the launch as "provocative" and stated that "North Korea has ignored its international obligations...and further isolated itself from the community of nations." America, Japan and South Korea will discuss the launch at an emergency UN Security Council meeting at 15:00 EDT (1900 GMT).

Pyongyang's one ally, China, has called for "restraint" on all sides. Both China and fellow veto power Russia oppose further sanctions on North Korea.

Resolution 1718 enacted in the wake of a stated 2006 nuclear weapons test bans North Korea from missile development. North Korea claims that the rocket is a launch vehicle to orbit a satellite, however its neighbours suggest that this is simply a cover for a long-range missile test, a missile that could potentially hit Alaska and the West Coast of the United States.