In a meeting with top military leaders yesterday, Kim blamed Washington and Seoul for the current frictions, saying they had trampled on peace overtures from Pyongyang.
"The current situation is very grave," Kim was quoted as saying by the North's official KCNA news agency today.
Kim, the supreme commander of the Korean People's Army (KPA), told his most senior officers that despite the North's conciliatory gestures, South Korea and the United States had pushed ahead with joint military drills that Pyongyang views as rehearsals for an invasion.
The North Korean military and people will never tolerate the "US policy of hostility" and will "crush it thoroughly", Kim added.
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The rhetoric seemed largely aimed at a domestic audience and Kim's more combative remarks were not translated in the English version of the KCNA dispatch.
Just one month ago, inter-Korean relations appeared to be enjoying something of a thaw.
In February the two rivals held rare, high-level talks, after which they held the first reunion in more than three years for families divided by the 1950-53 Korean War.
But the mood soon soured, and recent weeks have seen North Korea conduct a series of rocket and missile tests, culminating last month in the test-firing of two medium-range ballistic missiles capable of striking Japan.
On Monday, North Korea conducted a live-fire drill along the disputed maritime border. After some shells crossed the boundary, South Korea responded and the two sides fired hundreds of artillery rounds into each other's territorial waters.
Although South Korean intelligence reports say there are no signs of an imminent test, analysts note that the North is treading a familiar path that has previously ended in an underground bunker.