North Korea has warned that its military has been cleared to wage an attack on the US using "smaller, lighter and diversified nuclear" weapons.
The Pentagon, meanwhile, said that it will deploy a missile defence system to the US 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 US 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 authorised to counter US aggression with "powerful practical military counteractions", including nuclear weapons.
However, North Korea's nuclear strike capabilities remain unclear. Pyongyang is believed to be working towards 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.
Earlier, US defence secretary Chuck Hagel labelled North Korea's rhetoric as a real, clear danger and threat to the US and its Asia-Pacific allies. And he said the US is doing all it can to defuse the situation, echoing comments a day earlier by secretary of state John Kerry.
"Some of the actions they've taken over the last few weeks present a real and clear danger and threat to the interests, certainly of our allies, starting with South Korea and Japan and also the threats that the North Koreans have levelled directly at the United States regarding our base in Guam, threatened Hawaii, threatened the West Coast of the United States," said Mr Hagel. He said he believes that the US has had "measured, responsible, serious responses to those threats".
Deployment of the Terminal High Altitude Area Defence System is the latest step the US has taken to bolster forces in the region in a far-reaching show of force aimed at countering the North Korean threat. The Pentagon has already dispatched bombers, stealth fighters and ships. The land-based missile defence system includes a truck-mounted launcher, tracking radar, interceptor missiles and an integrated fire control system. The Pentagon said the system will boost defences for American citizens in Guam, a US territory, and US forces stationed there.
Tensions have escalated between North and South Korea in recent weeks. The communist North has vowed to increase production of nuclear weapons materials, and threatened a pre-emptive strike against the US. Mr Hagel told an audience at the National Defence University that there is a path to peace on the troubled Korean peninsula, but it does not include making nuclear threats or taking provocative actions.