SEOUL (AFP) - North Korea said Wednesday that South Korea's decision to join a US-led anti-proliferation drill is tantamount to a declaration of war, and declared it was longer bound by their 1953 armistice.

The communist state said it considers Seoul's decision to join the Proliferation Security Initiative (PSI) "as a declaration of war against us."

"Our military will no longer be bound by the armistice accord as the current US leadership... has drawn the puppets (South Korea) into the PSI," said the statement from the North's military representative at the border truce village of Panmunjom.

The statement said that if the armistice is no longer binding, "the Korean peninsula will go back to a state of war."

This meant North Korean troops would take "corresponding military action," the statement said without giving details.

"Those who have provoked us will face unimaginable merciless punishment."

The statement on Pyongyang's official media also said it "will not guarantee the legal status" of five South Korean islands near the disputed inter-Korean border in the Yellow Sea.

Neither would it guarantee the safe passage of US and South Korean naval and civilian vessels in the area, it said.

In response to the North's nuclear test on Monday, South Korea announced it would become a full member of the PSI initiative to curb trade in weapons of mass destruction.

"Any tiny hostile acts against our republic, including the stopping and searching of our peaceful vessels... will face an immediate and strong military strike in response," the statement said.

"The US imperialists and the traitor Lee Myung-Bak's group have driven the situation on the Korean peninsula into a state of war."

Relations have been icy since President Lee took office in Seoul in February 2008 and took a tougher line with the North.

The area around the disputed Yellow Sea border, known as the Northern Limit Line, was the scene of bloody naval clashes in 1999 and 2002.

The US stations 28,500 troops in the South.

The North's military said it has "strong military power and striking means" which can hit a "vital US point."

South Korea's defence ministry responded calmly and said no reinforcements are being sent to the west coast region.

"The military is maintaining its defence posture as strongly as usual," a spokesman told AFP.

"The military is closely monitoring the situation while thoroughly preparing for any contingencies."