Japan's military is undergoing a major transformation to give it more government clout and a bigger role in international peacekeeping while aligning it more closely with U.S. forces, a government report said Tuesday.

The annual report by Japan's Defense Agency also stressed that Tokyo is under increasing pressure to defend itself from possible attack by North Korean ballistic missiles, and — while careful not to call China a threat — urged Beijing to provide more information of its military expenditures to ease tensions in the region.

CountryWatch:Japan

This year's report devotes a full chapter to the realignment of the roughly 50,000 U.S. troops in Japan and efforts to meld the Japanese and U.S. forces into a more effective, more closely coordinated force.

The realignment, the result of years of negotiations, involves a streamlining of the U.S. military in Japan — including the transfer of some 8,000 U.S. Marines off the southern island of Okinawa to the U.S. territory of Guam. It also entails closer coordination on intelligence-gathering and in ballistic missile defense, a major concern for Japan.

The report repeatedly cites North Korea's development of long-range missiles and nuclear weapons as a destabilizing factor in the region, and strongly condemned its test-firing of seven missiles into the Sea of Japan on July 4. It also criticized Pyongyang for pouring money into military expenditures "while it is suffering severe economic difficulties and must rely on international aid for food."

"These activities of North Korea escalate tensions on the Korean Peninsula and are a serious source of concern not only for our nation but for all of east Asia," the report said.

The 429-page report also expressed concern over the strengthening of China's military, stating that its navy has become especially active. Relations between Japan and China have been tense in recent months in part because of a dispute over potential energy reserves in waters claimed by both nations.

"We are in a region which, unlike Europe after the Cold War, still has territorial disputes and unification issues," the report said. "Using their economic growth, many countries are boosting their military spending and modernizing their armed forces."

While Japan is not significantly increasing expenditures, it is overhauling its military in other ways.

Japan's Cabinet last month endorsed a bill to upgrade the Defense Agency to a full-fledged ministry, reflecting the growing role of the country's military at home and abroad. The upgrade would bolster the agency's status within the government and put it in a better position to negotiate for more funds when the national budget is being divvied up.

Japan currently spends about 4.8 trillion yen (US$43 billion; euro33.68 billion) on defense each year, putting it behind the United States, Russia, China and Britain. It has a standing army of about 150,000, and its air force and navy are among the most powerful in Asia.

Since Japan's crushing defeat in 1945, the military has been tightly constrained by the postwar pacifist constitution, which renounces the country's right to use force to settle international disputes and limits its troops to a strictly defensive role.

With the backing of Washington, Prime Minister Junichiro Koizumi has spearheaded efforts to "normalize" Japan's so-called "Self-Defense Forces" by bringing them out from under the shadow of the country's militarist past and expand their role in international humanitarian operations.

Last week, he presided over a ceremony marking the return of Japan's troops from a 2 1/2-year non-combat mission rebuilding the infrastructure in southern Iraq, the most dangerous deployment of Japanese troops since World War II. Tokyo also announced this week that it would continue to provide logistical support for anti-terror operations in Afghanistan.