North Korea has announced it is voiding non-aggression pacts with South Korea and severing its hotline with Seoul, hours after threatening the US with a pre-emptive nuclear strike.

North Korea "abrogates all agreements on non-aggression reached between the North and the South," the state-run Committee for the Peaceful Reunification of Korea said in a statement.

"It notifies the South side that it will immediately cut off the North-South hotline," said the statement, which was carried by the official Korean Central News Agency.

The statement came just hours after the UN Security Council unanimously voted to impose tough sanctions against the rogue nation.

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All Security Council members, including North Korea's main ally China, voted for tougher sanctions aimed at further isolating and financially crippling Kim Jong-un's regime.

The vote came after North Korea threatened to launch a nuclear missile at the US, saying a new war was "unavoidable" because of joint South Korean and US military exercises.

The North's foreign ministry said the military "will exercise the right to a pre-emptive nuclear attack to destroy the strongholds of the aggressors."

North Korea has made repeated threats, but this one raised the rhetoric to a new level, emboldening North Korean soldiers and civilians, who staged a rally in the capital Pyongyang.

The rally was addressed by senior military and party officials who denounced the US and warned that Washington would reap the consequences of its "aggression".

But a US senator said the threat from the North was "absurd" and warned it would be "suicide" if the country went ahead with a nuclear strike.

After carrying out three nuclear tests in 2006, 2009 and the latest on February 12 - and after a rocket launch in December - North Korea now faces one of the toughest UN sanctions regimes ever imposed.

The sanctions include wider bans on the sale of military technology and luxury goods, including gems, pearl jewellery, yachts and luxury cars.

More North Korean officials are being personally targeted with travel bans, and the resolution also tightens restrictions on the North's financial dealings, notably on "bulk cash" transfers.

"Taken together, these sanctions will bite and bite hard," US ambassador to the United Nations Susan Rice told reporters.

"They increase North Korea's isolation and raise the cost to North Korea's leaders of defying the international community."

Sorry, this video has expired Susan Rice says the entire world wants a denuclearised North Korea

The resolution calls for "enhanced vigilance" over North Korean diplomats, who US officials suspect have been carrying home suitcases full of cash to get around financial sanctions.

"When North Korea tries to move money to pay for its nuclear and ballistic missile programs, countries must now block those transfers even if the money is being carried in suitcases full of vault cash," Ms Rice said.

"Likewise North Korean banks will find it much harder to launder money for the DPRK (Democratic People's Republic of Korea) nuclear program.

"North Korea's ruling elite, who have been living large while impoverishing their people, will pay a direct price for this nuclear test."

The new UN resolution threatens "further significant measures" if the North stages a new nuclear test or rocket launch.

Ms Rice negotiated the sanctions with China's ambassador Li Baodong, who said the resolution was an "important step forward" and that his country wanted "full implementation".

"The top priority now is to defuse the tension," he said.

But he stressed that efforts must also be made to bring North Korea back into six-party negotiations which would bring together China, the United States, Russia, Japan and the two Koreas.

'Unequivocal message'

North Koreans rally in Pyongyang on Thursday. The sign in the background reads: "Dear supreme commander comrade, please just issue an order!". ( Reuters )

Among the individuals named in the sanctions are the two top officials at the Korea Mining Development Trading Corporation.

The resolution described this group as North Korea's "primary arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons".

Earlier resolutions gave states the right to inspect suspect cargos. Those inspections will become mandatory.

The new measures also call on states to turn away aeroplanes if there are reasons to believe they carry prohibited items.

UN secretary-general Ban Ki-moon, a former South Korean foreign minister, said the resolution sent an "unequivocal message" to North Korea that "the international community will not tolerate its pursuit of nuclear weapons".

The North's foreign ministry said adoption of the resolution would fast-track North Korean plans to carry out what it has already promised will be "powerful" countermeasures.

The North said earlier this week that it would withdraw on Monday from the armistice that halted the 1950-53 Korean War.

A foreign ministry spokesman warned a second Korean war was "unavoidable", because the US and South Korea had refused to cancel their joint military exercise.

"Now that the US is to light a fuse for a nuclear war, [our] revolutionary armed forces ... will exercise the right to a pre-emptive nuclear attack to destroy the strongholds of the aggressors," the spokesman said in a statement carried by the Korean Central News Agency (KCNA).

Following the threat the US said it was "fully capable" of defending itself against any North Korean ballistic missile strike.

White House spokesman Jay Carney told reporters the US military could deal with any such attack and repeated earlier warnings that North Korea would gain nothing by threats and provocations.

Another top US lawmaker said the threat from the North was "absurd" and warned it would be "suicide" if they went ahead with a nuclear strike.

"I do not think the regime in Pyongyang wants to commit suicide, but that, as they must surely know, would be the result of any attack on the United States," Senator Bob Menendez told the Senate Foreign Relations Committee.

In the past, the North has threatened attacks on US forces in South Korea and also claims to possess long-range missiles capable of carrying a nuclear warhead to the continental US.

Meanwhile, Australia's Foreign Affairs Minister Bob Carr said Australia played a constructive role in bringing in the latest sanctions as a non-permanent member of the UN Security Council.

Senator Carr says the North Korean threat to carry out a nuclear strike showed the nature of the regime.

"Certainly that statement confirms again the unique nature of this regime in North Korea. It is special in every way," he said.

"The world had no alternative however but to agree on terms for a Security Council resolution that gives effect for a new level of sanctions.

"Beyond this the response is really one for the North Korean ruling elite."

Sorry, this video has expired Bob Carr speaks about the UN resolution

ABC/AFP