Outraged over comments in the South about possible hostage-taking and a military response from Seoul, a North Korean government-run committee threatened to pull North Korean workers out of Kaesong as well.
In Monaco, U.N. Secretary-General Ban Ki-moon said he was "very much disappointed and concerned" by the North's move to restrict access by South Korean personnel and goods into Kaesong's industrial complex and called for the measure to be lifted as soon as possible.
North Korea's military statement Thursday, from an unidentified spokesman from the General Bureau of the Korean People's Army, said its troops had been authorized to counter U.S. "aggression" with "powerful practical military counteractions," including nuclear weapons.
It said America's "hostile policy" and "nuclear threat" against North Korea "will be smashed by the strong will of all the united service personnel and people and cutting-edge smaller, lighter and diversified nuclear strike means."
U.S. Defense Secretary Chuck Hagel said Washington is doing all it can to defuse the situation.
"Some of the actions they've taken over the last few weeks present a real and clear danger and threat" to the U.S. and its allies, Hagel said Wednesday.
White House spokesman Jay Carney has called on Russia and China, two countries he said have influence on North Korea, to use that influence to persuade the North to change course.
On Thursday, Russian Foreign Ministry spokesman Alexander Lukashevich criticized a move by the North Korean parliament this week to declare the country in effect a nuclear weapons state.
"It's categorically unacceptable to see such defiant neglect by Pyongyang of U.N. Security Council resolutions and fundamental regulations in the area of non-proliferation of weapons of mass destruction," he said.
South Korea's Defense Ministry said its military is ready to deal with any provocation by North Korea. "I can say we have no problem in crisis management," deputy ministry spokesman Wee Yong-sub told reporters.
The 11-day U.S.-South Korean joint military drills in March involved 10,000 South Korean and about 3,000 U.S. troops, incorporating fighter jets and nuclear-capable stealth bombers. Those coincided with two months of separate U.S.-South Korean field exercises that began March 1.
On Sunday, Kim Jong Un led a high-level meeting of party officials who declared building the economy and "nuclear armed forces" as the nation's priorities.
North Korea is believed to be working toward building an atomic bomb small enough to mount on a long-range missile. Long-range rocket launches designed to send satellites into space in 2009 and 2012 were widely considered covert tests of missile technology, and North Korea has conducted three underground nuclear tests.
"I don't believe North Korea has the capacity to attack the United States with nuclear weapons mounted on missiles, and won't for many years. Its ability to target and strike South Korea is also very limited," nuclear scientist Siegfried Hecker, a senior fellow at the Center for International Security and Cooperation at Stanford University, said this week.
In comments posted on CISAC's website, Hecker said North Korea knows a nuclear attack would be met with "a devastating nuclear response."
Hecker has estimated that North Korea has enough plutonium to make several crude nuclear bombs. Its announcement Tuesday that it would restart a plutonium reactor indicated that it intends to produce more nuclear weapons material.
The U.S.-Korea Institute at Johns Hopkins School of Advanced International Studies has analyzed recent commercial satellite imagery of the Nyongbyon nuclear facility, where the reactor was shut down in 2007 under the terms of a disarmament agreement. A cooling tower for the reactor was destroyed in 2008.
The analysis published Wednesday on the institute's website, 38 North, says that rebuilding the tower would take six months, but a March 27 photo shows building work may have started for an alternative cooling system that could take just weeks. Experts estimate it could take three months to a year to restart the plant.