South Korea is raising its alert on the new coronavirus to the “highest level”, President Moon Jae-in said on Sunday, as the country reported 123 new infections.

South Korea has seen a rapid surge in the number of coronavirus cases in recent days after a cluster of infections emerged from a religious sect in the southern city of Daegu last week.

The national toll of 556 cases is now the highest outside China, apart from the Diamond Princess cruise ship in Japan.

"The COVID-19 incident faces a grave turning point. The next few days will be crucial," Moon said following a government meeting on the virus.

"The government will raise the alert level to the highest level of 'grave' according to experts' recommendations and drastically strengthen our response system," Moon said.

He also urged officials not to hesitate from taking "unprecedented powerful measures" to contain the outbreak.

On Sunday, South Korea reported 123 new cases and two deaths, taking the countrywide toll to four.

Meanwhile, Italy and Iran took drastic containment steps as worldwide fears over the epidemic spiralled.

The contagion's spread prompted the World Health Organisation (WHO) to warn that Africa's unprepared health systems left the continent vulnerable to the COVID-19 disease, which spilled out of China and has infected more than 77,000 people in more than 25 countries.

'Extraordinary measures'

Italy and Iran began introducing the sort of containment measures previously seen only in China, which has put tens of millions of people under quarantine lockdown in the epicentre province of Hubei.

More than 50,000 people in about a dozen northern Italian towns near the business hub of Milan were urged by authorities to stay home, while shops and schools were shuttered.

Among dozens of cases, Italy on Friday became the first European country to report one of its nationals had died from the virus — a 78-year-old retired bricklayer in the region of Veneto.

That was followed on Saturday by the death of a 77-year-old woman in Lombardy.

Italian Prime Minister Giuseppe Conte said the government was weighing "extraordinary measures" to halt further infections.

China reported another 97 deaths in its daily update on Sunday, taking its total to 2,442, plus 648 new infections. Nearly 80,000 infections have been reported worldwide.

Chinese deaths and infections remain concentrated in the hard-hit city of Wuhan, where the virus is believed to have emanated from a live animal market in December.

China's infection rate has slowed sharply from earlier in the epidemic, but Chinese flip-flopping over counting methods has sowed confusion over its data.

There also was growing concern over the difficulty of detecting the virus.

Japan on Sunday confirmed that a woman who tested negative and disembarked from the coronavirus-stricken Diamond Princess cruise ship later tested positive.

Japan has already been criticised over its handling of the ship, which has seen more than 600 cases of COVID-19.

Many passengers were allowed to disembark without being properly tested or despite having close contact with infected people.

More than 1,000 crew remain on board and are expected to serve a 14-day quarantine.

Italian officials said all patients in Lombardy were linked to a 38-year-old man whom Italian media say dined in January with a friend who came from China, but who has since tested negative.

Fears for Africa

Iran ordered the closure of schools, universities and cultural centres across 14 provinces from Sunday following five deaths in the Islamic Republic — the most outside East Asia and the first in the Middle East.

Iran's outbreak surfaced on Wednesday and has quickly worsened with 28 cases confirmed.

"The concern is that we have seen a very rapid increase (in Iran) in a matter of a few days," said Sylvie Briand, director of the WHO's global infectious hazard preparedness department.

Iran's government also ordered all "art and cinema events" nationwide cancelled until the end of the coming week.

Iraq on Thursday clamped down on travel to and from Iran, and flag carrier Kuwait Airways has suspended flights to the country.

Although Egypt is the only African country with a confirmed case of COVID-19, the WHO warned that the continent's health systems were ill-equipped to cope with a potential major outbreak and urged more cooperation among the African Union.

WHO chief Tedros Adhanom Ghebreyesus said necessary treatment tools such as respiratory support machines are "in short supply in many African countries and that's a cause for concern".

The US State Department said global anxiety was being stoked by a coordinated effort by thousands of Russian-linked social media accounts to spread conspiracy theories that the outbreak was a US-orchestrated ploy to damage China, officials said.

Russia's foreign ministry dismissed the allegation as "deliberately false".