North Korea has threatened "all-out war" in response to exercises by South Korean and US troops, starting Monday.
The South Korean capital Seoul would be turned into a "sea of flames", the Korean Central News Agency warned.
Pyongyang also said the South should stop sending propaganda leaflets and balloons over the border.
Inter-Korean relations have been extremely tense since 46 South Koreans died when their warship was sunk last March.
Seoul blamed the North for the incident, something Pyongyang denies.
But tensions rose even further after the North shelled a frontier island in November, killing four South Koreans.
Military talks aimed at defusing tensions and restarting dialogue broke down earlier this month.
About 12,800 US troops and some 200,000 South Korean soldiers and reservists will take part in the military exercises, which will last 11 days, according to US and South Korean forces.
Seoul insists the drill is purely defensive but North Korea says it is a pretext for an invasion from the South.
"The army and people of the DPRK [North Korea] will return bolstered nuclear deterrent of our own style for the continued nuclear threat... and our own missile striking action for their vicious attempt to eliminate our missiles," KCNA said.
The North routinely issues war rhetoric against South Korea and the US, but analysts say the risk of clashes is higher when the two sides are not talking to each other.
Earlier, Pyongyang said it would fire across the border if South Korean did not "immediately stop psychological warfare".
The South has been launching balloons, carrying leaflets critical of the Pyongyang regime and news about the recent democracy protests in the Arab world, over the heavily fortified border.
"South Korea is driving the Korean peninsula to overall confrontation, with beefing up anti-republic, psychological plots," the North Korean statement went on.
South Korea has also been attaching food, clothes and radios to the balloons it sends over towards the North.
Pyongyang tightly controls access to the Internet and attempts to block other sources of information about the outside world.