South Korea and the United States are playing down North Korea's threat it is entering a 'state of war' with the South.
Tensions have been high since North Korean leader Kim Jong-un ordered a third nuclear weapons test on 12 February this year, breaching United Nations sanctions and ignoring warnings from its only major ally, China, not to do so.
The North has been threatening to attack the South and US military bases almost on a daily basis since the beginning of March, when American and South Korean militaries started routine drills that have been conducted for decades without incident, Reuters reports.
On Saturday, North Korea announced the state of war, promising stern physical actions against any provocative act.
"From this time on, the North-South relations will be entering the state of war and all issues raised between the North and the South will be handled accordingly," a statement carried by the North's official KCNA news agency said.
KCNA said the statement was issued jointly by the North Korean government, ruling party and other organisations.
Pyongyang has also threatened to close a border industrial zone, the last remaining example of inter-Korean cooperation which gives the impoverished North access to $US2 billion in trade a year.
The United States said it takes Pyongyang's threats seriously, but cautions that the North has a history of bellicose rhetoric.
The Seoul government said there is nothing in the North's latest statement to cause particular alarm.
On Friday, Kim Jong-un signed an order putting missile units on standby to attack American military bases in South Korea and the Pacific, after the US flew two nuclear-capable stealth bombers over the Korean peninsula.
US officials described the flight as a diplomatic sortie aimed at reassuring allies South Korea and Japan, and at trying to nudge Pyongyang back to nuclear talks, though there was no guarantee Mr would get the message as intended.
The two Koreas have been technically in a state of war since a truce that ended their 1950-53 conflict. Despite its threats, few people see any indication Pyongyang will risk a near-certain defeat by re-starting full-scale war.
There was no sign of unusual activity in the North's military to suggest an imminent aggression, a South Korean defence ministry official said.
Australian Foreign Minister Bob Carr said the government is considering imposing its own sanctions against North Korea above and beyond those already in place, but did not elaborate.