The North has previously fired missiles capable of reaching the entire US mainland, and has carried out six nuclear tests.

A self-imposed ban on such tests -- Kim declared they were no longer needed -- has been at the centrepiece of the nuclear diplomacy between Pyongyang and Washington over the last two years, which has seen three meetings between Kim and US President Donald Trump, but little tangible progress.

Analysts said the declaration amounted to Kim putting a missile "to Donald Trump's head" -- but that escalation by Pyongyang would probably backfire.

Any actual test is likely to infuriate Trump, who has repeatedly referred to Kim's "promise" to him not to carry them out, and has played down launches of shorter-range weapons.

Negotiations between the two sides have been largely deadlocked since the breakup of their Hanoi summit in February, and the North set the US an end-of-year deadline for it to offer fresh concessions on sanctions relief, or it would adopt a "new way".

"There is no ground for us to get unilaterally bound to the commitment any longer," the official KCNA news agency cited Kim telling top ruling party officials.

"The world will witness a new strategic weapon to be possessed by the DPRK in the near future," he added.

The full meeting of the central committee of the ruling Workers' Party -- an indication of a major policy shift -- and the KCNA report came ahead of Kim's annual New Year speech, a key moment in the North Korean political calendar, reviewing the past and setting out goals for the future.

It will be Kim's eighth such address, after he revived the tradition started by his grandfather -- North Korea's founding leader Kim Il Sung -- but discontinued during his father's rule.

Kim made clear to party officials that the North was willing to live under international sanctions to preserve its nuclear capability.

"The US is raising demands contrary to the fundamental interests of our state and is adopting brigandish attitude," KCNA cited him as saying.

Washington had "conducted tens of big and small joint military drills which its president personally promised to stop" and sent high-tech military equipment to the South, he said, and stepped up sanctions against the North.

"We can never sell our dignity," he added, saying Pyongyang would "shift to a shocking actual action to make (the US) pay for the pains sustained by our people".

- 'Geopolitical chicken' -

For months, Pyongyang has been demanding the easing of international sanctions imposed over its nuclear and ballistic missile programmes, while Washington has insisted it takes more tangible steps towards giving them up.

"North Korea has, in effect, put an ICBM to Donald Trump's head in order to gain the two concessions it wants most: sanctions relief and some sort of security guarantee," said Harry Kazianis of the Center for the National Interest in Washington.

"Kim Jong-un is playing a dangerous game of geopolitical chicken," he added.

"He is gambling that threatening another demonstration of his ability to hit the US homeland with a nuclear weapon will somehow push America into granting more concessions."

But the strategy was unlikely to be effective, he said, as Washington was likely to respond with "more sanctions, an increased military presence in East Asia and more fire and fury style threats coming from Donald Trump's Twitter account".

The US has already indicated that it will react if the North carried out a long-range missile test.

At the weekend Trump's National Security Advisor Robert O'Brien said the administration would be "extraordinarily disappointed and we'll demonstrate that disappointment".

"We have a lot of tools in our toolkit, and additional pressure can be brought to bear on the North Koreans," he said.

An ICBM launch would also be likely to frustrate China, the North's key diplomatic backer and provider of trade and aid, which always stresses stability in a region it regards as its own back yard.

But ties between Pyongyang and Beijing have warmed markedly in the past two years, with Chinese President Xi Jinping paying his first visit to the North as head of state in June, and Beijing and Washington at loggerheads over trade and other issues.

In December China and Russia -- another key economic partner for the North -- proposed loosening UN sanctions against Pyongyang, and analysts say Kim is likely to seek to exploit rivalries between Washington, Beijing and Moscow.