North Korea's military has pledged to cancel the 1953 ceasefire that ended the Korean War.
The move is straining already frayed ties between Washington and Pyongyang as the United Nations moves to impose punishing sanctions over the North's recent nuclear test.
The Korean People's Army Supreme Command boasted of having "lighter and smaller nukes" and warned late on Tuesday of "surgical strikes" meant to unify the divided Korean Peninsula.
The statement cited US-South Korean joint military drills that Pyongyang propaganda considers invasion preparation, and a US-led push to secure a UN Security Council resolution calling for sanctions in response to North Korea's February 12 nuclear test. A US-China draft resolution is expected to be circulated at the UN this week.
The North's statement threatens to block a communications line between North Korea and the US at the border village separating the two Koreas, and to nullify the 60-year-old Korean War armistice agreement on March 11. That is when two weeks of US-South Korean military drills will involve 10,000 South Korean and 3,500 US forces.
Pyongyang's recent nuclear test and rocket launches, and the subsequent call for UN punishment, have increased already high animosity between the North and Washington and Seoul. The US and others worry that North Korea's third nuclear test takes it a big step closer toward its goal of having nuclear-armed missiles that can reach America, and condemn its nuclear and missile efforts as threats to regional security and a drain on the resources that could go to North Korea's largely destitute people.
North Korea says its nuclear programme is a response to US hostility that dates to the 1950-53 Korean War, which ended with an armistice, not a peace treaty, leaving the Korean Peninsula still technically in a state of war.
Even amid the tension, however, North Korea has recently welcomed high-profile American visitors, including former basketball star Dennis Rodman. He met the North Korean leader, Kim Jong Un, called him an "awesome guy" and said Kim wanted President Barack Obama to call him.
The US-China draft resolution at the UN would impose some of the strongest sanctions ever ordered by the security council, diplomats said. It reflects growing anger over the country's defiance of three previous rounds of sanctions aimed at halting all nuclear and missile tests. The draft resolution would make it significantly harder for North Korea to move around the funds it needs to carry out its illicit programs.
US Secretary of State John Kerry said Mr Obama and the American people want to see Kim engage in peace talks.