North Korea's military is threatening a "merciless sacred war" against South Korea just days after Pyongyang struck a deal with the US to suspend nuclear activities in return for aid.

The statement by the Supreme Command of the Korean People's army contains common North Korean rhetoric but highlights the lingering tensions since violence in 2010 killed 50 South Koreans and raised fears of war.

Wednesday's US-North Korea nuclear deal was seen as a breakthrough. But Washington has said that improved inter-Korean ties are crucial for success.

An unidentified North Korean military spokesman said Seoul was creating a "touch-and-go" situation because of joint military exercises going on now with the US.