The war talk is seen as a way for North Korea to draw attention to the precariousness of the security situation on the Korean Peninsula and to boost the military credentials of young leader Kim Jong Un.
The Korean War ended in 1953 with a truce, not a peace treaty, and the U.S. and North Korea do not have diplomatic relations.
For weeks, the U.S. and South Korea have staged annual military drills meant to show the allies' military might. North Korea condemns the drills as rehearsal for an invasion.
Citing the tensions, North Korea on Monday pulled more than 50,000 workers from the Kaesong industrial park, which combines South Korean technology and know-how with cheap North Korean labor. It was the first time that production was stopped at the decade-old factory park, the only remaining symbol of economic cooperation between the Koreas.
South Korea's point man on North Korea, Unification Minister Ryoo Kihl-jae, urged Pyongyang to stop heightening tensions and to discuss the restart of operations in Kaesong.
In Pyongyang, meanwhile, there was no sense of panic. Across the city, workers were rolling out sod and preparing the city for a series of April holidays.
North Korean students put on suits and traditional dresses to celebrate Kim Jong Un's appointment as first secretary of the Workers' Party a year ago.
A flower show and art performances are scheduled over the next few days in the lead-up to the nations' biggest holiday, the April 15 birthday of North Korea founder Kim Il Sung, father of the country's second leader, Kim Jong Il, and grandfather of the current leader.
Kim Jong Il elevated the military's role during his 17-year rule under a policy of "military first," and the government devotes a significant chunk of its annual budget to defense. Human rights groups say the massive spending on the military and on development of missile and nuclear technology comes at the expense of most of its 24 million people. Two-thirds face chronic food shortages, according to the World Food Program.