The country has already tested two plutonium-based nuclear weapons and has long been suspected of running a parallel effort to develop uranium-based weapons.
Reaction to sanctions
KCNA said the North's decision to push ahead with its nuclear programs was a reaction to Security Council's moves to tighten sanctions against the country following its second test of a nuclear weapon in May.
The report called the resolution a "wanton violation" of North Korea's sovereignty and dignity.
"We are prepared for both dialogue and sanctions," the report quoted a letter to the head of the Security Council as saying.
"If some permanent members of the [council] wish to put sanctions first before dialogue, we would respond with bolstering our nuclear deterrence first before we meet them in a dialogue."
The letter pointedly blamed the Security Council's decision to impose sanctions following its April rocket launch, while taking no action following one by South Korea last month.
"Had the UNSC, from the very beginning, not made an issue of the DPRK's (North Korea's) peaceful satellite launch in the same way as it kept silent over the satellite launch conducted by South Korea on August 25, 2009, it would not have compelled the DPRK to take strong counteraction such as its 2nd nuclear test," the letter said.
The US, China, Japan, Russia and South Korea have been negotiating with North Korea for years in an effort to persuade North Korea to abandon its nuclear program in exchange for aid and other concessions.
However, North Korea walked away from the talks earlier this year, saying the so-called six-party process was dead and announcing that it was scrapping all previous agreements.
|North Korea announced earlier this year that it was abandoning disarmament talks [EPA]
North Korea has said it needs nuclear weapons as a security guarantee against what it sees as the "hostile policies" of the US, which has 28,500 troops based in South Korea.
Balbina Hwang, a former US assistant secretary of state for East Asia and Pacific affairs, told Al Jazeera that North Korea's announcement was "reiterating the same message they have been sending since January, which is that they are not interested in six-party talks".
She said the North had decided the talks were not working for them, because it was going to force them to "a very critical step – namely were they going to give up their nuclear weapons or not?"
"What they're doing is telling the UN that sanctions will not work, that they will continue with weapons development of weapons of international rules, and instead that they'd rather deal bilaterally with South Korea, the US and China – because that's their best way of keeping the regime going and also being able continue with their nuclear weapons."
South Korea's foreign ministry has expressed regret over the North's announcement, urging Pyongyang to return to the stalled disarmament talks.
"The North's move to continue provocative steps... can never be tolerated. We will deal with North Korea's threats and provocative acts in a stern and consistent manner," the ministry said in a statement.
Al Jazeera's Nick Spicer, reporting from the United Nations, said the North Korean statement will likely be seen as a defiant move, especially given that the US has just taken on the rotating presidency of the Security Council.
The US has said it will make non-proliferation the top priority of its time in the presidency.
Our correspondent says the North Korean announcement will also likely be seized upon by critics of the Obama administration to say policy that the White House's policy of engagement with North Korea and other so-called rogue regimes is a failure.