Foreign Minister Bob Carr says the Federal Government is considering imposing its own sanctions against North Korea, as the rogue state continues to ratchet up threats against South Korea.

North Korea has threatened to shut down a joint industrial complex with the South in the latest warning directed at its neighbour country.

The threat comes hours after Pyongyang declared it was in a "state of war" with South Korea, and warned Seoul and Washington that any provocation would swiftly escalate into an all-out nuclear conflict.

The two Koreas have remained technically at war since a truce was reached years ago, but a peace treaty was never signed.

Senator Carr says the latest move by the North is no surprise.

"We see this as more evidence of a regime that places militarism ahead of the needs of its own people," he said.

"It is a peculiarly repressive regime domestically, and a belligerent and militaristic one in its international stance."

Senator Carr says Australia is considering going above and beyond the sanctions already in place.

"The United Nations sanction, which we helped craft in the Security Council, imposed a very strict embargo on the supply of weapons and nuclear materials to North Korea," he said.

"We're looking at further sanctions of our own, an extra layer of sanctions going further than the UN one."

Senator Carr did not elaborate on what the further sanctions might involve.

'Stern measures'

The threat to shut down the joint industrial complex is the latest in a string of dire-sounding pronouncements from Pyongyang that have been matched by tough warnings from Seoul and Washington.

The rhetoric is fuelling international concerns that the situation might spiral out of control.

The threat from the body in charge of the industrial complex just north of the Korean border followed an announcement by the North on Wednesday that it was cutting its last military hotline with the South.

"We will relentlessly close the industrial complex if South Korea tries to damage our dignity even a little," the body said in a statement carried by the North's state-run Korean Central News Agency (KCNA).

"We warn that stern measures will be taken if (South Korea) continues to make reckless remarks defaming our dignity," it said, adding the fate of the complex depends "entirely" on the attitude of Seoul.

The industrial complex, which lies 10 kilometres inside North Korea was established in 2004 as a symbol of cross-border cooperation.

North Korea has always been wary of allowing crises in inter-Korean relations to affect the zone - a crucial hard-currency earner for the communist state.

But there had been concerns that operations at the complex would be affected by Pyongyang's move to sever the military hotline used to monitor movement in and out of the zone.

The line was used daily to provide the North with the names of those seeking entry to Kaesong, guaranteeing their safety as they crossed one of the world's most heavily militarised borders.

A day after state media reported the North Korean leader Kim Jong-un had put his military on standby to attack US military bases in South Korea and the Pacific, the North said all matters between the two Koreas "will be handled according to wartime protocol".

"The long-standing situation of the Korean peninsula being neither at peace nor at war is finally over," the statement said, adding that any US or South Korean provocation would trigger a "a nuclear war".

The two Koreas have technically remained at war for the past six decades because the 1950-53 Korean War concluded with an armistice rather than a peace treaty.

South Korean soldiers set up barricades across the road linking to North Korea's Kaesong Industrial Complex last month. ( AFP: Jung Yeon-Je )

'Not really new'

The North's repeated threats of war has prompted Moscow to renew its calls for restraint on the Korean peninsula.

"We hope that all parties will exercise maximum responsibility and restraint and no one will cross the point of no return," senior Russian Foreign Ministry official Grigory Logvinov told Interfax news agency.

"We expect that everyone understands that a recurrence of the war on the peninsula is definitely unacceptable."

When asked by reporters if Pyongyang had the same understanding, Mr Logvinov said: "Of course. We were in contact with the North Korean side".

In Seoul, the Unification Ministry insisted the war threat was "not really new".

"This is not really a new threat - just part of a series of provocative threats," the Unification Ministry said.

The White House labelled the latest statement from Pyongyang as "unconstructive" and, while taking it "seriously", sought to place the immediate threat level in context.

"North Korea has a long history of bellicose rhetoric and threats and today's announcement follows that familiar pattern," said National Security Council spokeswoman Caitlin Hayden.

Tension has been high since North Korea conducted a third nuclear weapons test in February in breach of United Nations sanctions and despite warnings from its ally, China, for it not to do so.

Earlier this month the North announced it was ripping up the armistice and other bilateral peace pacts signed with Seoul in protest against South Korea-US joint military exercises.

ABC/wires