Stepping up its war of words, North Korea has declared it has entered a "state of war" with South Korea.
All issues between the two countries will be dealt with in a wartime manner, said North Korea, threatening "stern physical actions" against South Korea.
The latest announcement has come a day after North Korean leader Kim Jong-un placed his country's strategic rockets on stand-by, targeting South Korea and the US.
The two countries have technically been at war for more than six decades following the armistice that ended the three-year conflict in the early 1950s.
"From this moment, the North-South relations will be put in a state of war, and all issues arising between the North and the South will be dealt with according to wartime regulations," said the state-run Korean Central News Agency.
North Korea said: "The state of neither peace nor war has ended on the Korean Peninsula."
It added that it will "immediately punish any slightest provocation hurting its dignity and sovereignty with resolute and merciless physical actions without any prior notice".
Many experts believe that given the current situation, North Korea would not start a full-fledged war.
The defiant nation warned of an all-out war if "provoked" further. "If the US and the South Korean puppet group perpetrate a military provocation for igniting a war against the DPRK (North Korea) in any area, including the five islands in the West Sea of Korea or in the area along the Military Demarcation Line, it will not be limited to a local war but develop into an all-out war, a nuclear war."
South Korea has denounced the latest threats as mere rhetoric but insisted that the country is ready to face any eventuality.
While the unification ministry in Seoul said: "North Korea's statement today ... is not a new threat but is the continuation of provocative threats," the defence ministry said in a statement: "Our military is maintaining full preparedness to leave no blind point in safeguarding the lives and safety of the people."
The ministry also said there has been no increase in military activities in North Korea in the last few hours.
The US has taken serious note of the latest threat. Caitlin Hayden, spokeswoman for the National Security Council said: "We take these threats seriously and remain in close contact with our South Korean allies."