The communist North, which tested an atomic weapon in October 2006, was reacting to the August 18-22 exercise involving computer simulations and tens of thousands of US and South Korean troops.

"The DPRK (North Korea) will bolster the war deterrent for self-defence... and resolutely foil any provocation with strong countermeasures," the communist party newspaper Rodong Sinmun said.

The newspaper commentary, similar in tone to many of Pyongyang's past threats, came as a snag has hit six-party negotiations on ending North Korea's nuclear weapons programmes.

The talks involve China, both Koreas, the United States, Japan and Russia.

North Korea last year agreed to abandon its atomic programmes in return for energy aid and diplomatic and security guarantees.

It is disabling its main plutonium-producing nuclear complex ahead of the final phase of the agreement, in which it should dismantle the plants and hand over all nuclear weapons and atomic material.

But the US and North Korea cannot agree on ways to verify a nuclear declaration which the North submitted in June as part of the six-nation deal.

Both sides held talks in New York on Friday to break a deadlock over measures to verify Pyongyang's nuclear weapons programme that could pave the way for removing the hardline communist state from a terrorism blacklist.

The US refuses to remove the North from the list until the verification issue is resolved.

It reportedly wants full access by outside inspectors to cover not just North Korea's admitted plutonium programme but also its alleged secret uranium enrichment programme and proliferation activities.

Last week, the North accused the US of not honouring its side of the deal.

Under legal procedures, the earliest Washington could have removed North Korea from the terrorism list was August 11.

The two Koreas are technically still at war since a 1950-1953 conflict ended in an armistice.

earlier related report
US, NKorea hold talks to break nuclear impasse
The United States and North Korea held talks Friday to break a deadlock over measures to verify Pyongyang's nuclear weapons program that could pave the way for removing the hardline communist state from a terrorism blacklist.

The talks in New York between Sung Kim, the State Department's top Korea expert, and North Korean officials were a follow-up to a meeting held about three weeks ago in Beijing over verification of the North's nuclear program declared in June, officials said.

"Obviously, they are going to talk about the six-party talks, obviously recent discussions about the verification package, which we have been calling on the North Koreans to produce," said State Department spokesman Robert Wood before the talks.

Asked whether Pyongyang was set to agree on a proposed verification protocol, Wood said Sung Kim was "going to assess where things are with North Korea in his conversations with North Korean officials.

"The US government wants to see this verification package as soon as possible so that we can move forward with this delisting," he added.

Washington has said it would remove North Korea from the State Sponsors of Terrorist List if Pyongyang agreed to a comprehensive verification protocol proposed at the last six-nation talks aimed at disbanding the state's atomic weapons arsenal.

But Pyongyang wanted the United States to remove it from the blacklist first as part of what it called an "action-for-action" plan.

Details of how the talks progressed were not immediately available late on Friday.

The United States reportedly wants full access by inspectors to all nuclear sites and verification to cover not just North Korea's plutonium program -- which fuelled an atomic test in October 2006 -- but also an alleged secret uranium enrichment program and proliferation activities.

North Korea has been negotiating since 2003 with South Korea, the United States, China, Russia and Japan on disbanding its atomic program in return for energy aid and diplomatic and security guarantees.

It has already shut down its main nuclear reactor and is disabling it as part of the six-nation agreement.

An agreement on verifying its nuclear program plan will pave the way for dismantling North Korea's nuclear network as well as the surrender of atomic material and weapons.

Last month, Pyongyang handed over a declaration of its plutonium production program but did not answer US allegations about its nuclear proliferation to Syria, or claims of an enriched uranium weapons program.

It merely acknowledged in a separate document US concerns about the uranium and proliferation issues and assured it was not engaged in such activities and would not be involved in them in the future.

The meeting Friday came four days after North Korea accused Washington of not honoring the six-nation denuclearization deal.

KCNA said "the United States has not kept its promise to remove us from the list of 'states sponsoring terrorism' up until today, past the deadline... which is crucial to the complete implementation of the agreement.

"This is a clear violation of the 'action for action' principle which is the basis for the realization of denuclearization," it said, adding that US behavior demonstrated "a lack of faith."

Under legal procedures, the earliest Washington could have removed North Korea from the terrorism list was August 11.

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