N.Korea parliament meets, leader Kim skips session

* Tensions high after South Korean navy ship sinking

* May take days to see results of parliament meeting

* Leader Kim Jong-il not in attendance - report

(Adds start of session)

By Jon Herskovitz

SEOUL, April 9 (Reuters) - North Korea convened an annual meeting on Friday of its rubber-stamp parliament, where the secretive state typically reveals changes to its ruling elite and may tip its hand on succession plans for its communist dynasty.

Leader Kim Jong-il, 68, did not appear, the South's Yonhap news agency said. Kim does not always attend the meetings of the Supreme People's Assembly, and when he does, he almost never makes speeches.

It usually takes a few days for pertinent details of the meeting to filter their way out of the secretive state.

Pyongyang is under pressure to end its boycott of nuclear disarmament talks, while tensions with its far richer southern neighbour are high after the sinking of a South Korean naval ship last month in which Seoul has said the North may have had a hand.

South Korea's defence minister has said it was possible the ship was hit by a North Korean torpedo, worrying investors who fret about an increased chance of armed conflict between the rivals who station more than 1 million troops near their border. [ID:nTOE63103B]

Seoul has few appealing options if the North was behind the sinking, but would not likely take an aggressive stance because it could escalate into major conflict that would harm the South's interests, said Andrei Lankov, an expert on the North.

"Such raids would scare investors away from South Korea and damage its financial rating," he wrote in an opinion piece in the International Herald Tribune.


At last year's Supreme People's Assembly session, leader Kim made his first public appearance after he was suspected of suffering a stroke in 2008. He appeared gaunt, with thinning hair and having lost his trademark paunch. [ID:nSEO324677].

Images of Kim in his state's media over the past year have shown him in improved health.

"This year, the Cabinet will boost the production of consumer goods and grain by leaps and bounds by putting spurs to the development of light industry and agriculture," a report on the North's official KCNA news agency quoted a top cadre as saying.

KCNA also carried figures on percentage changes for spending, but offered no monetary amounts on the actual expenditure.

Kim faced a rare crisis to his iron grip on power late last year when a botched currency reform sparked almost unheard of civil unrest, angering an impoverished public by raising prices and making it even more difficult to obtain already scarce food.

Kim has yet to reveal to the public his plans for succession in the state his family has run for more than 60 years.

Intelligence sources said the North's elite have been informed he intends to anoint his youngest son, Kim Jong-un, as his heir.

Analysts will be looking to see if Jong-un, 26 and educated in Switzerland, is named as a member of the assembly, which would be a major sign he has been officially moved into the ruling elite. They will also looking closely to see if there will be a purge of economic cadres because of the currency debacle.

The carefully choreographed sessions usually do not touch on the North's atomic ambitions or its negotiations with the outside world to reduce the threat it poses to the economically powerful region in return for aid and better global standing.

Last year, Kim was re-elected supreme military ruler and left no doubt about his second-in-command when he elevated his brother-in-law, Jang Song-taek, to a powerful military post.

Analysts said Jang was expected to help ease Kim's youngest son into a leadership role and serve as buffer between him and the state's powerful military. (Additional reporting by Christine Kim and Jung Hee-jung in Seoul and Yoko Kubota in Tokyo) (Editing by Ron Popeski)