"There is no clear authority to seize the shipment," White House spokesman Ari Fleischer said. "The merchant vessel is being released."

The announcement follows an admission earlier Wednesday that Yemen had bought the missiles from North Korea months ago. Yemen demanded to be allowed to have them.

It had agreed in principle not to buy arms from North Korea, but the promise wasn't in effect yet.

U.S. Navy forces took control of the ship and began escorting it to Diego Garcia, an island in the Indian Ocean, on Wednesday.

White House sources say discussions between Secretary of State Colin Powell, Vice-President Dick Cheney and senior Yemeni officials brought about the ship's release, and a promise from Yemen not to buy any more missiles in the future.

Spanish sailors attached to the U.S.-led coalition patrolling the Arabian Sea boarded the North Korean Sosan at the end of a high seas chase.

The frigate fired three bursts of machine gun fire to force the ship to stop, the last burst directly over the bow.

Sharpshooters took out cables running from the Sosan's bow so a helicopter could get close enough to drop a line for seven special forces soldiers to board the ship.

The unflagged ship originally refused to identify itself, then told the Spanish frigate SPS Navarra it had a cargo of cement. The Spaniards found the cement as well as 15 missiles, warheads, spare parts and rocket fuel.

U.S. officials say the ship was stopped by the Spanish patrol boat about 960 kilometres east of the Horn of Africa and U.S. officials were called to take part in the inspection.

Yemen is on a list of countries the United States says support terrorists.

Yemen already has Scud missiles, but agreed not to acquire any more or any more parts for the ones they have.

North Korea has long been a supplier of missiles to regimes in the Middle East, and U.S. officials said it isn't surprising this shipment was intercepted.

The ship had been followed by satellites and the U.S. Navy since it left port in North Korea.

"This was suspected by American authorities for some time. North Korea is one of the major proliferators and it's busy proliferating again," said U.S. Deputy Secretary of State Richard Armitage.