File: North Korean vessel Kang Nam I, is seen anchored in Hong Kong waters.
June 18: The South Korean Army Multiple Launch Rocket System fires during a military drill against a possible attack from North Korea.
June 15: Tens of thousands of North Koreans gather at a rally at Kim Il Sung Square in Pyongyang, North Korea.
June 10: South Korean soldiers use binoculars to look at the North side from Imjingak, north of Seoul, South Korea.
June 9: South Korea heavy armored vehicles assemble during a military drill against a possible attack from North Korea in Paju.
Released June 8: North Korean leader Kim Jong Il gestures as he visits the Kosan Fruit Farm.
An undated photo released in January 2009 shows a missile firing drill at an undisclosed location in North Korea.
May 30: South Korean marines man at their positions at the South Korea's western Yeonpyong Island, near the disputed sea border with North Korea.
The U.S. Navy vessel that had been monitoring a North Korean ship suspected of carrying illicit weapons has handed over duties to another Navy destroyer, officials told FOX News.
The USS John C. McCain has pulled back into port and is no longer monitoring the North Korean Kang Nam, according to U.S. defense officials.
The Kang Nam, which is currently in the Taiwan Straits and appears to be on course for Myanmar, is now being monitored by the the U.S.S. McCampbell, according to two senior U.S. defense officials.
One official told FOX News, "Think of this as a baton race, and the baton has been handed off now."
The U.S. Navy will honor North Korea's notice to mariners that warns ships to stay out of international waters off its coast from June 25 to July 10, another official said.
The North Koreans have asked that a 19,000-square-mile portion of the sea off of its south eastern city of Wonsan be cleared during that period.
North Korea is believed to have begun boosting its military capabilities in the wake of the U.S.-led war in Iraq, South Korea's Defense Ministry said. After the U.S. invasion of Iraq, North Korea claimed it would be the next target.
North Korea's has one of the world's largest armies with 1.2 million troops, including 180,000 special forces.
The Kang Nam which left the port of Nampo last week is the first ship being monitored under the U.N. sanctions imposed earlier this month following North Korea's defiant underground nuclear test in May.
But confrontation — which North Korea has said it would consider an act of war — seems unlikely since the resolution calls on U.N. members with "reasonable grounds," to inspect North Korean vessels only after getting consent from the nation whose flag is on the ship — in this case, North Korea's.
If the country refuses U.N. members not to provide ships in question with fuel or other services.
China's Foreign Ministry spokesman Qin Gang said his country will "strictly observe" the resolution and urged other nations to do the same and "refrain from acts that might escalate the tension."
Singapore, the world's busiest port and a top refueling center, said officials would "act appropriately."
The Kang Nam is expected to dock at Burma's Thilawa port in the next few days, according to the Irrawaddy, an online magazine operated by independent exiled journalists from Burma, citing an unidentified port official.
North Korea is believed to have sold guns, artillery and other small weapons to Burma, said Kim Jin-moo, an analyst at Seoul's state-run Korea Institute for Defense Analyses.
Meanwhile, the U.S. and North Korea's neighbors were discussing how to deal with the increasingly defiant country amid signs it may be preparing a long-range missile test.
Ambassador Kathleen Stephens said the U.S. "remains willing and eager to engage North Korea" through diplomacy. But she said Washington and its allies have begun outlining defensive measures should the North continue with provocative acts.
"We're committed to do what is necessary to protect" the American people and their allies, she said at a Seoul forum also attended by ambassadors from China, Japan and Russia.
The vice defense ministers of Japan and South Korea also met Tuesday in Seoul, nuclear envoys from South Korea and Russia were slated to hold talks Wednesday in Moscow and a U.S. defense official was in the region for talks this week in Beijing, Seoul and Tokyo.
The Associated Press contributed to this report.