North Korea announced that it is considering plans for a missile launch over the Pacific, US territory of Guam, just hours after President Donald Trump said any threat to the United States would be responded to with "fire. and fury ".
The sharp rise in tensions has also inflamed the financial markets. North Korea said it "scrutinized" a plan to strike Guam, which is home to some 163.000 people and a US military base that includes a submarine, battalion, airbase, and coast guard group.
A spokesperson for the Korean People's Army told state news agency KCNA that the plan could be put into practice at any time once leader Kim Jong Un decides.
Guam Governor Eddie Calvo rejected the threat and said the island is ready for "any eventuality" with strategically placed defenses. He said he had been in contact with the White House and there was no change in the level of threat and alert.
"Guam is an American territory ... We are not just a military installation," Calvo said in an online video message.
North Korea, which is pursuing missile and nuclear weapons programs in opposition to UN Security Council resolutions, also accused the United States of planning a "pre-emptive war" and said in another statement that any US project would start a total war where Korea would wipe out the United States.
Washington has warned it is ready to use force if necessary to stop the North Korean leader's missile and nuclear programs, but prefers global diplomatic action, including sanctions, for now. The UN Security Council unanimously adopted new sanctions on North Korea last Saturday.
Trump told reporters in New Jersey on Tuesday:
"North Korea will no longer make threats to the United States, otherwise they will have to suffer an unprecedented attack of fire and fury like the world has never seen."
China, North Korea's closest ally, despite Beijing's anger over Pyongyang's missile and nuclear programs, described the situation as "complex and sensitive" and called for calm and a return to talks.
"China calls on all parties to support the main direction of a political resolution to the nuclear issue of the Korean peninsula and avoid any word or action that could escalate the problem and heat the situation."
North Korea has kept no secret of its plans to develop a nuclear missile that could hit the United States and ignored all the invitations to stop its weapons programs.
Pyongyang says its intercontinental ballistic missiles (ICBMs) are a legitimate means of defense against US hostility, including joint military exercises with South Korea.
Meanwhile, Asian equities declined, with South Korea's benchmark index taking substantial losses.
But the whole area could be affected by the effects on the financial market.
South Korea and the United States remain technically still in war with North Korea after the Korean conflict 1950-53 ended with a truce, not a peace treaty.
The South Korean capital, Seoul, is home to around 10 million people and is threatened by a wide range of North Korean rockets and artillery, which would be impossible to destroy immediately with a US counterattack. Tens of thousands of US troops remain stationed in South Korea and neighboring Japan, the only country to have been attacked with nuclear weapons. Last Wednesday, the 72nd anniversary of the atomic bombing of the city of Nagasaki by the United States was celebrated.