THAAD missile defense system initially capable in S.Korea - sources

By Phil Stewart and Idrees Ali

WASHINGTON (Reuters) - The U.S. military's THAAD missile defense system in South Korea has reached an initial operating capability to defend against North Korean missiles, U.S. officials said on Monday, forging ahead with the system despite staunch objections from China.

Beijing has opposed activation of the Terminal High Altitude Area Defense (THAAD), arguing the system's radar could be used to spy into its territory, despite assurances from Washington that THAAD is purely defensive.

The United States is looking for China to use its influence with Pyongyang to rein in its advancing nuclear and missile programs, and it is unclear how Beijing will react to the development.

U.S. President Donald Trump has said a "major, major conflict" with North Korea is possible, and THAAD's activation adds another layer of complexity to escalating tensions.

The system has also generated controversy in South Korea. The favorite to win South Korea's presidential election on May 9, has called for deployment to be delayed until after the next administration is in place and can review the decision.

Local residents have worried they will be a target for North Korean missiles.

The U.S. officials, who spoke on condition of anonymity, said the THAAD system was initially capable. It would not be fully operational for a period of months, however, one of the officials cautioned.

A second official said South Korea established a "restricted operating zone control measure" over the THAAD site on April 30, to control air space. The official added the battery was now prepared to conduct initial operational missions.

Lockheed Martin Corp is the prime contractor for the THAAD system.

WHO WILL PAY?

In an interview with Reuters last week, Trump praised THAAD, saying it was "phenomenal, shoots missiles right out of the sky," but questioned why the United States was paying for it.

"I informed South Korea it would be appropriate if they paid. It's a billion-dollar system," Trump said.

Still, South Korea has since said the United States reaffirmed it would shoulder the costs of THAAD.

In a telephone call on Sunday, Trump's national security adviser, H.R. McMaster, reassured his South Korean counterpart, Kim Kwan-jin, that the U.S. alliance with South Korea was its top priority in the Asia-Pacific region, the South's presidential office said.

The United States currently has six THAAD batteries worldwide whose job is to intercept and destroy a ballistic missile in its final phase of flight, either inside or just outside the earth's atmosphere.

Given its specifications are secret and that it has never been used in wartime, THAAD's ability to deal with a barrage of missiles time is uncertain, however.

In addition to the new THAAD system, South Korea also operates a Patriot PAC-3 missile defense system while Japan is upgrading its PAC-3 defenses and mulling a shore-based version of the Aegis missile-defense system used on Japanese ships.

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(Reporting by Phil Stewart and Idrees Ali; Editing by James Dalgleish)