The United States has said it will "not accept" North Korea as a nuclear state - as Pyongyang raised tensions by refusing the South entry to a joint industrial complex.
The North says it will restart all nuclear facilities including its mothballed Yongbyon reactor, which is able to produce bomb-grade plutonium
North Korean leader Kim Jong-un insisted it was only seeking a deterrent and did not repeat recent threats to attack South Korea and the US.
But the North delayed the daily opening of its Kaesong industrial zone with South Korea on Wednesday morning, in a move that could represent a sharp escalation of tensions between the two countries.
The North had previously threatened to close the joint complex as part of a stand-off with Washington and Seoul.
"We are waiting for access from the North Korean authorities," a Unification Ministry official said.
More than an hour after the time the daily entry clearance is normally granted, the ministry said 861 South Korean workers were in the industrial complex while 179 workers awaited access.
Vehicles wait to cross the border to the Kaesong complexThe complex is a rare lucrative source of income for the impoverished North since it was established as a form of joint-Korean cooperation in 2002.
Sky News' Asia Correspondent Mark Stone said the site was the only place where relations between the two countries existed.
"As with everything, it's hard to know whether this is more game-playing or whether they plan to keep it closed for a while," he said.
"But a number of analysts who have studied the Korean problem for some time said last week that while the park remained open, the situation was not overly worrying. Now it appears to be shut."
Both Washington and Seoul stressed their countries' military readiness and said denuclearisation was the only way forward for North Korea.
US Secretary of State John Kerry said: "What Kim Jong-un has been choosing to do is provocative, it is dangerous, reckless and the United States will not accept (North Korea) as a nuclear state."
He said the Barack Obama administration's deployment of advanced aircraft and warships to South Korea was a signal "that the United States will defend our allies and that we will not be subject to irrational or reckless provocation".
South Korean soldiers in drills near the zone separating the two KoreasMr Kerry, who will visit South Korea next week, reminded the North Koreans that "they have an option, and that option is to enter into negotiations for denuclearisation ... and to begin to focus on the needs of their people".
UN Secretary-General Ban Ki-moon appealed for dialogue and negotiation to resolve the crisis.
"Nuclear threats are not a game," he said.
"Aggressive rhetoric and military posturing only result in counter-actions, and fuel fear and instability."
A speech by the North's young leader, Kim Jong-un, given on Sunday but published in full by KCNA on Tuesday, appeared to dampen any prospect of a direct confrontation with the US by emphasising that nuclear weapons would ensure the country's safety as a deterrent.
"Our nuclear strength is a reliable war deterrent and a guarantee to protect our sovereignty," Mr Kim said.
"It is on the basis of a strong nuclear strength that peace and prosperity can exist and so can the happiness of people's lives."
The crisis flared after Pyongyang was hit with US sanctions for conducting a third nuclear test in February, before America and South Korea staged military drills that North Korea viewed as "hostile".
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