The proposal, which includes suspending a popular day tour by South Koreans to Kaesong, a city just across the border from South Korea, is part of a "first step to cope with the prevailing grave situation in relations", the North's official KCNA news agency said.
The agency said the border restriction were the result of "the evermore undisguised anti-DPRK (North Korea) confrontational racket of the south Korean puppet authorities."
The first regular train service between North and South Korea in half a century began in December 2007, and was hailed as a landmark in reconciliation between the rival nations.
But recent months have seen relations between the two sides plummet.
Tensions have apparently been fuelled by airdrops of anti-North Korean leaflets, sent across the border on helium balloons launched by South Korean activists.
Announcing the border closure plans on Monday, North Korea also criticised comments by Lee Myung-Bak, the South Korean president, during a recent visit to the US.
Lee reportedly said that his ultimate aim was the reunification of North and South Korean under a liberal democratic system.
Earlier on Monday South Korean executives of the Kaesong factories were reportedly summoned for a briefing by North Korean officials on the suspension of cross-border activities.
|The border curbs could cripple joint industrial and tourism operations [AFP]
More than 32,000 North Koreans work for 83 South Korean-owned factories at Kaesong, along with some 1,500 South Koreans, earning the impoverished North tens of millions of dollars a year.
KCNA said the head of North Korea's delegation to cross-border military talks had already informed his South Korean counterpart about the proposed restrictions.
"More strict order and discipline will be enforced as regards the passage and entry into the Kaesong Industrial Zone and Mount Kumgang tourist area and stringent sanctions applied against any violators of them," the North's statement said.
"The prospect of the inter-Korean relations will entirely depend on the attitude of the South Korean authorities," KCNA quoted the delegation head as saying.
Mount Kumgang on the east coast has been effectively shut down since July when North Korean soldiers shot dead a woman tourist who strayed into a restricted zone.
South Korea subsequently suspended tours across the heavily fortified frontier on safety grounds after the North refused its demand for a joint investigation into the tragedy.
Monday's announcement on the border crackdown came shortly after the US confirmed that six-party talks on North Korea's nuclear disarmament would resume next month.
Condoleezza Rice, the US Secretary of State, said the goal of the December 8 meeting in China, which has hosted previous rounds of talks, was to "get agreement".
Rice, who was on her way to the Asia-Pacific Economic Cooperation (Apec) summit in Lima, commented on the pace of progress saying the North Koreans had taken more than 30 years to build their nuclear programme.
"I think it might take more than a couple to unravel it," she told reporters.