Ratcheting up the rhetoric, North Korea warned early Thursday that its military has been cleared to wage an attack on the U.S. using "smaller, lighter and diversified nuclear" weapons.

The Pentagon, meanwhile, said Wednesday that it will deploy a missile defence system to the U.S. Pacific territory of Guam to strengthen the region's protections against a possible attack.

The warning from an unnamed army spokesman and carried by Pyongyang's state-run news agency was the latest in a series of escalating threats from North Korea, which has railed for weeks against joint U.S. and South Korean military exercises taking place in South Korea and has expressed anger over tightened sanctions for a February nuclear test.

Washington calls the military drills, which this time have incorporated nuclear-capable stealth bombers, routine annual exercises between the allies. Pyongyang calls them rehearsals for a northward invasion.

The foes fought on opposite sides of the three-year Korean War, which ended in a truce in 1953. The divided Korean Peninsula remains in a technical state of war, and Washington keeps 28,500 troops in South Korea to protect the ally.

The military statement said North Korean troops had been authorized to counter U.S. aggression with "powerful practical military counteractions," including nuclear weapons.

However, North Korea's nuclear strike capabilities remain unclear. Pyongyang is believed to be working toward building an atomic bomb small enough to mount on a long-range missile but is thought to be several years from being capable of mastering the technology.

N. Korea bars workers from South at border

North Korea barred South Korean workers on Wednesday from entering a jointly run factory park just over the heavily armed border in the North, officials in Seoul say, a day after Pyongyang announced it would restart its long-shuttered plutonium reactor and increase production of nuclear weapons material.

The move on Wednesday to block South Koreans from going to their jobs at the Kaesong industrial complex, the last remaining symbol of detente between the rivals, comes amid increasing hostility from Pyongyang, which has threatened to stage nuclear and missile strikes on Seoul and Washington and has said that the armistice ending the 1950s Korean War is void.

Seoul's Unification Ministry spokesman Kim Hyung-suk said Pyongyang was allowing South Koreans to return home from Kaesong. Three workers returned Wednesday morning; dozens more were scheduled to return later. But Kim said about 480 South Koreans who had planned to travel to the park Wednesday were being refused entry.

North Korean authorities cited recent political circumstances on the Korean Peninsula when they delivered their decision to block South Korean workers from entering Kaesong, Kim said without elaborating.

It's the latest sign of deepening tensions on the Korean Peninsula. North Korea said Tuesday that it will quickly begin "readjusting and restarting" the facilities at its main Nyongbyon nuclear complex, including the plutonium reactor and a uranium enrichment plant. Both could produce fuel for nuclear weapons.

Analysts saw the statement as Pyongyang's latest attempt to extract U.S. concessions by raising fears of war. Experts estimate reactivating the reactor could take anywhere from three months to a year.

The rising tide of threats in recent weeks are seen as efforts by the North to force new policies in Seoul, diplomatic talks with Washington and to increase domestic loyalty to young North Korean leader Kim Jong-un by portraying him as a powerful military commander.

North Korea is angry about South Korea-U.S. military drills and new UN sanctions over its Feb. 12 nuclear test, its third. The Korean Peninsula technically remains in a state of war because a truce, not a peace treaty, ended the Korean War. The United States stations 28,500 troops in South Korea as a deterrent to North Korea.

Worries about North Korea's nuclear timetable

The North's plutonium reactor began operations in 1986 but was shut down as part of international nuclear disarmament talks in 2007 that have since stalled. Tuesday's nuclear announcement underscores worries about North Korea's timetable for building a nuclear-tipped missile that can reach the United States, although it is still believed to be years away from developing that technology.

The North's rising rhetoric has been met by a display of U.S. military strength, including flights of nuclear-capable bombers and stealth jets at the annual South Korean-U.S. military drills that the allies call routine but that North Korea claims are invasion preparations.

The Kaesong industrial park started producing goods in 2004 and has been an unusual point of co-operation in an otherwise hostile relationship between the Koreas.

North and South Korea do not allow their citizens to travel to the other country without approval, but an exception had previously been made each day for the South Koreans working at Kaesong.

About 120 South Korean firms run factories in the border town of Kaesong, with 53,000 North Koreans working there. Using North Korea's cheap, efficient labour, the Kaesong complex produced $470 million US worth of goods last year.

Pyongyang threatened last week to shut down the park, which is run with mostly North Korean labour and South Korean know-how. It expressed anger over South Korean media reports that said North Korea hadn't yet shut the park because it is a source of crucial hard currency for the impoverished country.

'I feel worried' worker says

In 2009, North Korea closed its border gate in anger over U.S.-South Korean military drills, leaving hundreds of South Korean workers stranded in Kaesong for several days. The park later resumed normal operations.

"I feel worried that I'm unable to do business and also feel anxious," Joe In-suk, a 54-year-old South Korean who had planned to travel to Kaesong on Wednesday, said at a border checkpoint in Paju, South Korea. About a dozen South Korean trucks were lined up at the checkpoint leading into North Korea.

If North Korea continues to deny entrance to South Korean workers, it could be tantamount to a shutdown because Kaesong factories cannot operate production lines without supplies of raw materials sent regularly by truck from the South to the North.

A South Korean manager whose company runs a factory in Kaesong was worried that buyers would drop future orders if North Korea continued to block workers and supplies from the South.