N. Korea Warns U.S., Threatens to Turn S. Korea Into 'Sea of Fire'

North Korea warned the United States and South Korea on Thursday to call off military exercises scheduled for this weekend and to back off any new sanctions against the communist country or, as sources quoted leader Kim Jong Il, he would personally turn Seoul into a sea of fire.

The Daily NK quoted a source from Pyongyang as reporting that North Korean officials promised to "trample over anyone who insults the dignity of the Republic."

The source cited that in Kim's lecture he mentioned "Seoul as a Sea of Fire" if South Korea does not remove the loudspeakers from the DMZ area.

The warning issued on the sidelines of a meeting of Southeast Asian nations in the Vietnamese capital, Hanoi, came as tensions on the peninsula simmer over the sinking of a South Korean warship that killed 46 sailors. The North was blamed for the attack, but has denied any responsibility.

"Amid growing concerns by the international community, South Korea and the United States have announced they would hold joint naval exercises," said Ri Tong Il, a North Korean spokesman, according to Yonhap news agency. "Such a move presents a grave threat to the peace and security not only to the Korean peninsula, but to the region."

On Wednesday, Washington announced it would impose new sanctions aimed at stifling the North's nuclear activities. Ri said any new sanctions would be in violation of a U.N. Security Council statement approved earlier this month that condemned the sinking but stopped short of directly assigning blame.

"If the U.S. is really interested in the denuclearization of the Korean peninsula, it should halt the military exercises and sanctions that destroy the mood for dialogue," Ri told reporters.

Sanctions mean "escalation of the (US) hostile policy toward North Korea," he added.

He later said the North is willing to meet the U.S. and Japan on the sidelines of Friday's security meeting if they request it, but no such proposals have come, Yonhap reported.

Seoul has said there will be no one-on-one meetings with the North until an apology is issued for the sinking of the navy ship Cheonan, and though U.S. Secretary of State Hillary Rodham Clinton and representatives of the other countries involved in stalled nuclear talks will be in Vietnam, diplomats have said a meeting among the sides are unlikely.

In a sign of how tense relations are — and how difficult such meetings would be — U.S. Defense Secretary Robert Gates struck back Thursday at North Korea's criticism of the military drills. "My response to that is that I condemn their sinking of the Cheonan," Gates said to reporters in Jakarta, Indonesia.

Indonesian Foreign Minister Marty Natalegawa said he wasn't surprised the North was upset about the drills, but that South Korea and the U.S. have the right to conduct the military exercises.

"They can be angry on many things," he told reporters, speaking in English. "If you Google North Korea every day, you find all kinds of angry words, and I'll be in trouble if I follow my policy based on their state of emotion."

An international investigation blamed the North for the March ship sinking, which has raised tensions on the peninsula. The two Koreas remain in a state of war because a peace treaty was never signed to end their three-year war in the 1950s. Pyongyang cites the presence of 28,500 U.S. troops on South Korean soil as a main reason for building up its atomic program.

North Korea vehemently denies any involvement in the sinking, and has asked the U.N. Command governing the armistice to let the regime conduct its own investigation. Military officers from the command and North Korea were to meet along the heavily fortified border that divides the peninsula, known as the Demilitarized Zone, on Friday.

The 10 members of the Association of Southeast Asian Nations are now caught in the middle of a diplomatic tug-of-war, with the two Koreas battling over the exact wording of one paragraph in a regional security statement about the sinking. The statement will be issued Friday by ASEAN, along with 17 other nations that include the United States, Japan and both Koreas.

The North and its main ally China are pushing to avoid any terse wording, while South Korea and its staunch backer the United States want tough language condemning the attack and nuclear weapons on the Korean peninsula.

There was similar haggling earlier in the week during the ASEAN's foreign ministers meeting, which concluded with a watered-down version of what South Korea wanted. The ministers' statement "deplored" the ship sinking, but characterized it as an "incident" instead of an "attack."

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The Associated Press contributed to this report.