The 67-year-old Kim was diagnosed with the cancer around the time he was felled by a stroke last summer, Seoul's YTN television reported, citing unidentified intelligence officials in South Korea and China.
The report cited the officials saying the disease is "threatening" Kim's life.
Pancreatic cancer is usually found in its final stage, and considering Kim's age, he is expected to live no more than five years, the report said.
South Korea's spy agency said it could not confirm the report. Unification Ministry spokesman Chun Hae-sung told reporters he knows of nothing of the report.
Kim's health is a focus of intense media speculation due to concerns about instability and a power struggle if he were to die without naming a successor. His third and youngest son, Kim Jong Un, has widely been reported as being groomed as heir, but the regime has made no announcement to the outside world.
Monday's report came after Kim last week made a rare public appearance, in an annual memorial for his late father and North Korea's founder, Kim Il Sung.
Television footage showed him markedly thinner and with less hair _ only the second state event he has attended in person since the reported stroke. He also limped slightly, and the sides of his tightlipped mouth looked imbalanced in what were believed to be the effects of a stroke.
The images touched off speculation that he could have other health problems.
South Korea's spy agency has long suspected that Kim has diabetes and heart disease.
Medical doctor and professor Min Yang-ki of Seoul's Hallym University Medical Center has said diabetes usually leads to weight loss. The neurologist also said Kim's limping appears to be a result of a stroke. However, he said, overall it appeared Kim has recovered from that reported illness.
Kim walked on his own into a Pyongyang auditorium for last week's memorial at a normal pace and bowed while standing during a moment of silence.
North Korea experts said the latest images of Kim show he is still fit enough to rule.
The totalitarian leader, whose rule is buttressed by an intense cult of personality, knew that the people of North Korea would pay great attention to the memorial, and his appearance there is a message that he is in charge, Yang Moo-jin, a professor at Seoul's University of North Korean Studies, said last week.
Kim Jong Il took over North Korea after his father died in 1994 of heart failure at age 82, though he did not take on his father's title of president. He runs the North from his post as chairman of the National Defense Commission.
In early April, he presided over a parliamentary meeting where he was re-elected as leader.
The South's spy agency believes that Kim's 26-year-old youngest son, Jong Un, is sure to inherit North Korea, Seoul's Chosun Ilbo daily reported Monday, citing a recent report to the National Assembly by the National Intelligence Service.
The agency also reported that Kim Jong Il is expected to officially designate the son as his successor in 2012, the centennial anniversary of late national founder Kim Il Sung's birth, the paper said.
But the regime under the son is expected to be unstable and vulnerable to internal political strife as Kim Jong Il's brother-in-law, Jang Song Thaek, could attempt to snatch power, the paper said.
The spy agency declined to confirm the report.
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