The message warned the situation on the Korean peninsula has reached "a grave phase" due to Washington's "extremely hostile policy" toward Pyongyang.

"Greatest efforts should be directed to strenghthening the front of anti-imperialism and military affairs," said the message which came in the form of a joint editorial carried by North Korea's three newspapers representing the ruling communist party, military and youth guard.

The editorial has replaced a New Year's speech by North Korea's founding father Kim Il-Sung since he died in 1994.

The commentary said North Korea was ready to peacefully resolve its nuclear crisis but vowed to take the "toughest" measures unless Washington changed its stance towards Pyongyang.

"Consistent is our principled stand to seek a negotiated peaceful solution to the nuclear issue between the DPRK (North Korea) and the US. But we will always react with the toughest policy to the US hardline policy of totally denying and threatening the dignified idea and system of our style," it said.

The editorial urged North Korea's 1.1-million-strong armed forces to intensify "combat and political training in the spirit of staunch anti-imperialist struggle and with a strong dermination to wipe out the enemy."

"The enemies will suffer inescapable blows if they impose a war of any form upon us anytime."

Since the crisis began 14 months ago, the communist country has defended its nuclear programs as a self-defensive measure, fearing it could be the next target of a pre-emptive US attack after Iraq.

Iraq, North Korea and Iran have been described as the "axis of evil" by US President George W. Bush.

Referring to the fall of Iraqi leader Saddam Hussein, the editorial said: "Last year witnessed such tragic developments in the international arena as world peace was wantonly violated by the imperialists' strong-arm policy and their moves for aggression."

"This reality proved that it is impossible to protect the sovereignty of the nation and world peace unless the US 'logic of strength' is countered with force," it said.

The North has refused to give up its nuclear threat unless it receives concessions from Washington, including a non-aggression pact.

The editorial called for a change in economic management after admitting North Korea had passed through a decade of "unspeakable difficulties and ordeals."

"To this end it is necessary to establish a proper work system guiding and administering the economy and science and technology in a uniform manner and closely combine science and technology with production."

After failures in its centralized economy and natural disasters, North Korea introduced limited economic reforms in July 2002, raising wages and freeing prices.

The reforms, however, sent prices soaring and led to high foreign exchange rates. The North's energy shortage deepened after Washington and its allies stopped an annual shipment of 500,000 tonnes of fuel oil in November 2002.

For years, the impoverished country has relied on outside aide especially from South Korea to feed its 22 million people.

The nuclear crisis has slowed inter-Korean economic ties.

North Korea has been building a free industrial park close to the border with South Korea, underlining Pyongyang's desire to attract outside investment needed to revive its moribund economy.

But South Korean and foreign firms are reluctant to move into the park, reflecting the lack of confidence in Pyongyang.

WAR.WIRE