Following the Monday's nuclear test South Korea announced it would become a full member of the Proliferation Security Initiative (PSI), a US-led drive to curb trade in weapons of mass destruction.
It said the decision had already been taken following the North's controversial April 2 rocket launch, although the formal announcement was brought forward following the nuclear test.
But the move has provoked an angry reaction from the North which warned on Wednesday that any interception of its ships would constitute an "unpardonable infringement" on its sovereignty which would be met with "merciless punishment".
"Any tiny hostile acts against our republic, including the stopping and searching of our peaceful vessels... will face an immediate and strong military strike in response," it said in a statement by the state-run Korean Central News Agency.
Saying that the US had drawn South Korea into the PSI, the North Korean statement said it would also "no longer be bound" by the 1953 armistice that ended the Korean War.
Without a binding ceasefire "the Korean peninsula will go back to a state of war", a North Korean military representative was quoted as saying, adding that the North's troops would take "corresponding military action".
|Pyongyang's nuclear test and series of missile launches has sparked a global outcry [EPA]
"The US imperialists and the traitor Lee Myung-Bak's group have driven the situation on the Korean peninsula into a state of war," the statement added
Cross-border ties have been icy since Lee, the South Korean president, took office in Seoul in February 2008 and declared Seoul would take a tougher stance with the North.
The warning from the North came as South Korea's largest newspaper reported that the North had re-started its nuclear fuel reprocessing plant.
The Chosun Ilbo said US spy satellites had spotted activity at the plant in Yongbyon, indicating that operations to produce weapons-grade plutonium had resumed.
"There are various indications that reprocessing facilities in Yongbyon resumed operation [and] have been detected by US surveillance satellite, and these include steam coming out of the facility," it quoted an unnamed government source as saying.
The North had previously agreed to dismantle Yongbyon under a breakthrough deal in 2007, but the follow-up agreements fell apart and the six-party talks that concluded the agreement have since stalled.
Al Jazeera's Tony Cheng, reporting from Seoul, said the report of fresh activity at Yongbyon was credible given the North's angry threat in April that it would resume work at the plant.
That came after North Korea fired a rocket that it said had placed a satellite into orbit in April, although the US said it believed the launch was a cover for a test of long-range missile technology.
"The US hostile policy towards us is like beating a rock with a rotten egg"
Minju Joson, North Korean cabinet official newspaper
On Tuesday diplomats at the UN Security Council continued talks on possible action in response to the North's latest test but said they would need time to agree on a new resolution for further sanctions.
Susan Rice, the US envoy to the UN, said members wanted a "strong resolution with teeth", and that sanctions "could take very different forms" and might include "economic levers", she told CNN without elaborating.
The international community, including the North's main ally China, has strongly condemned the latest nuclear test but it is unclear how far China and Russia, two of the council's five permanent members, would go.
Both had last month blocked a new resolution to punish the North for its April 5 rocket launch.
Reacting to the council deliberations, North Korea's state media poured scorn on efforts to implement new sanctions.
"It is a ludicrous idea for the US to think that it can defeat us by sanctions," Minju Joson, the North's official cabinet newspaper, said.
"We have been living under US sanctions for decades. The US hostile policy towards us is like beating a rock with a rotten egg."