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SEOUL: North Korea said on Tuesday it was severing all ties with South Korea and cutting communications links in protest at claims that it had torpedoed one of Seoul's warships.
The North said it would expel all South Korean personnel from a jointly-run industrial estate at Kaesong north of the border, and ban South Korean ships and planes from its territorial waters and airspace.
The state Committee for the Peaceful Reunification of Korea said South Korea's claims that it had sunk the warship were tantamount to a declaration of war.
In a statement on the official news agency, it said it was freezing relations and abrogating a non-aggression agreement.
The statement further heightened regional tensions sparked by a report last week from a multinational investigation team.
The team said there was overwhelming evidence that a North Korean submarine had sunk the South Korean corvette on March 26 with the loss of 46 lives.
The US said Pyongyang's reaction was totally contrary to its self-interest. "I think it's odd," State Department spokesman Philip Crowley told reporters.
"South Korea is one of the most dynamic economies in the world... North Korea is unable to care for its citizens. It's unable to feed its people."
"I can't imagine a step that is less in the long-term interest of the North Korean people than cutting off further ties with South Korea," Crowley said.
Seoul on Monday announced a package of reprisals, including a halt in most trade. It plans to refer the sinking to the United Nations Security Council.
The North said it would not talk to the South again for the remainder of President Lee Myung-Bak's term of office.
The conservative leader began a five-year term in February 2008, adopting a tougher line towards the North than his liberal predecessors.
The North also vowed an "all-out counterattack" against the South's decision to resume an official cross-border propaganda campaign including loudspeaker broadcasts.
It did not give details but had earlier threatened to open fire at the loudspeakers.
The North also said all inter-Korean issues would be handled "under a wartime law" but did not elaborate.
"There is no need to show any mercy or patience for such confrontation maniacs, sycophants and traitors and wicked warmongers as the Lee Myung-Bak group," it said.
The statement came hours after the North's military accused South Korea's navy of trespassing in its waters around the disputed Yellow Sea border and threatened military action.
The communist North denies involvement in the sinking of the corvette, despite widespread international condemnation. It threatens full-scale war if there is any attempt to punish it.
In an apparent show of strength, the South's defence ministry said the navy would stage an anti-submarine drill in the Yellow Sea on Thursday. A spokesman would not confirm a Yonhap news agency report that 10 ships would be involved.
The military also said a destroyer was stationed in the Jeju Strait off the south coast to stop the North's cargo ships using it. The South shut its sea lanes to the North as part of the reprisals announced on Monday.
US Secretary of State Hillary Clinton is due in Seoul on Wednesday to show support to Washington's close ally South Korea during its confrontation.
The United States has backed Seoul's punitive measures and announced it would soon hold anti-submarine and other naval exercises with it.
Susan Rice, the US ambassador to the United Nations, told reporters Washington backs Seoul's decision to refer the sinking to the UN Security Council.
"We await South Korea's decision as to when and how it will bring this to the Security Council," she said.
"When it does we will work not only with South Korea but other partners on the Security Council to determine the appropriate form and content of a council response," Rice added.
Clinton, during two days of talks in Beijing, had pressed China to get tougher on its ally North Korea.
China - which could veto any UN move for new sanctions - has not blamed the North for the sinking but called for restraint by all sides.
"The two sides believe that ensuring peace and stability in east Asia and the Korean peninsula is critical," State Councillor Dai Bingguo said in Beijing on Tuesday at a joint press appearance with key US officials.
Clinton said the two sides share the objective of peace and stability on the Korean peninsula. "Now we must work together again to address the serious challenge provoked by the sinking of the South Korean ship."
Financial markets across Asia responded nervously to the escalating crisis, with one unconfirmed report from a group of North Korean defectors claiming that the North had placed its armed forces on combat alert.
The North says the South's "puppet" authorities have faked evidence of its involvement as part of a plot to ignite conflict. - AFP/ls/de
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