North Korea has threatened a "merciless" strike against the South after activists burned effigies of the ruling Kim dynasty on the anniversary of the death of former leader Kim Jong-Il, officials said Friday.

The warning was contained in a message sent Thursday by the secretariat of the National Defence Commission, the North's highest military body, through a military hotline, the South's defence ministry said.

In rallies on Tuesday to mark the second anniversary of the death of Kim Jong-Il, South Korean conservative groups burned effigies of young North Korean leader Kim Jong-Un, his late father and grandfather.

The North said the rallies had insulted the "highest dignity" of its leadership, and threatened to take "merciless" retaliatory acts without prior warning, the defence ministry said.

"We've sent a reply vowing to react sternly to any provocations by North Korea," ministry spokesman Kim Min-Seok told reporters.

The North's threat comes at a time of growing concern over the regime's stability after last week's execution of Jang Song-Thaek, a high-level official who was the uncle and former political mentor of Kim Jong-Un.

Seoul and Washington have warned of possible provocative acts by the nuclear-armed North.

North Korea has a long history of bellicose rhetoric, regularly threatening strikes against South Korea.

Tensions between the two Koreas had appeared to cool after soaring in February, when the North carried out its third underground nuclear test in defiance of UN Security Council resolutions.

But relations have soured again in recent weeks.

On Friday the South's presidential office said it would set up a new security control tower to counter threats from North Korea.

Ju Chul-Ki, a top security official in the office of President Park Geun-Hye, said that a standing committee and secretariat of the National Security Council would be established.

The move will see the president hold high-level security talks about once a week, Ju said, citing a "grave" security situation on the Korean peninsula and in Northeast Asia.

Currently, such security talks are held only on orders from President Park.