Shadowed by a nuclear test, guarded by armed soldiers and with a two-star general handing out prizes, Kim Min-Jung's elementary school graduation was a moment to savour.

"I knew that despite the event, our graduation would take place as planned, and I'm happy I got so many presents and awards," Kim told reporters after the ceremony Friday.

The "event" was a 6-7 kiloton nuclear test by North Korea three days before, which triggered global outrage but failed to scupper graduation day at Kim's school, despite its unique location slap in the middle of the world's last Cold War frontier.

Daeseongdong village and its elementary school lie inside the Demilitarised Zone (DMZ) dividing North and South Korea -- once described by former US president Bill Clinton as "the scariest place on Earth".

Four kilometres (2.5 miles) wide and 248 kilometres long, the DMZ is a largely depopulated no-man's land of heavily-fortified fences, bristling with the landmines and listening posts of two nations that technically remain at war.

Daeseongdong ("Freedom Village") is one of only two villages inside the DMZ, which extends two kilometres each side of the actual borderline.

North Korea has its own showcase village inside the zone, but on the other side, which flies the communist state's emblem on what is claimed as the world's tallest supported flagpole.

The 200 or so villagers living in Daeseongdong benefit from various incentives, including exemption from military service and tax-free income from their rice and ginseng farms.

But life in the village involves numerous restrictions, including a midnight curfew following an evening roll call.

Education-wise, there is only the elementary school and Kim and the five children who graduated with him on Friday must leave the village to continue their studies.

Dressed in traditional costumes, that clashed with the army fatigues of the ever-present soldiers, the six pupils were plied with gifts and awards from military and civilian organisations that attend the graduation ceremony each year.

Journalists were allowed in for the ceremony, but told they could not ask questions related to Tuesday's nuclear test.

Mass rally in Pyongyang celebrates nuclear test
Seoul (AFP) Feb 15, 2013 - More than 100,000 troops and civilians staged a mass rally in Pyongyang to celebrate North Korea's nuclear test and praise the "matchless" bravery of leader Kim Jong-Un, state media said Friday.

The rally in the capital's sprawling Kim Il-Sung square on Thursday was attended by top party and military officials, as well as police workers and students, the official Korean Central News Agency (KCNA) said.

A number of speakers addressed the rally, praising Tuesday's test as the "brilliant fruition of the extraordinary decision and matchless gut of the dear respected Kim Jong-Un", KCNA said, in reference to the leader's courage.

The young leader, who took over after the death of his father Kim Jong-Il in December 2011, did not attend the rally.

It was the North's third test, following previous detonations in 2006 and 2009, and seismic data suggested it was significantly more powerful.

"It serves as a striking demonstration of the might of a scientific and technological power and a military power capable of manufacturing any strike," KCNA said.

North Korea said the test -- widely condemned by the international community -- was a direct response to UN sanctions imposed on Pyongyang after its long-range rocket launch in December.

Pyongyang accused the United States of leading the sanctions charge in the UN Security Council, and speakers at Thursday's rally threatened "merciless retaliatory blows" if the US pushed tougher sanctions after the nuclear test.