Tens of thousands of North Koreans have come out in a show of defiance following US President Donald Trump's threats of 'fire and fury'.

The North Koreans gathered for a massive rally at Kim Il-sung Square in Pyongyang on Wednesday with photos showing citizens holding propaganda placards and waving their fists in the air.

Footage shows thousands of North Korean workers dressed in white shirts as they angrily marched through the square brandishing flags.

The elite class, who were dressed in black, applauded the workers as they rallied.

It came after a strict round of sanctions were passed by the United Nations security council over the weekend.

North Korea also officially dismissed Trump's threats on Wednesday, declaring the American leader 'bereft of reason' and warning ominously that 'only absolute force can work on him'.

In a statement carried by state media, General Kim Rak-gyom, who heads North Korea's rocket command, also said his country was 'about to take' military action near the US Pacific territory of Guam.

He said the North would finalise a plan by mid-August to fire four mid-range missiles hitting waters 19 to 25 miles away from the island.

The plan will then go to the commander in chief of North Korea's nuclear force and 'wait for his order,' Kim was quoted by KCNA as saying. He called it a 'historic enveloping fire at Guam.'

The statement only served to escalate tensions further in a week that has seen a barrage of threats from both sides. While nuclear confrontation still seems incredibly remote, the comments have sparked deep unease in the United States, Asia and beyond.

A day after evoking the use of overwhelming US military might, Trump touted America's atomic supremacy. From the New Jersey golf resort where he's vacationing, he tweeted that his first order as president was to 'renovate and modernise' an arsenal that is 'now far stronger and more powerful than ever before.'

It was a rare public flexing of America's nuclear might. Trump's boasting only added to the confusion over his administration's approach to dealing with North Korea's expanding nuclear capabilities on a day when his top national security aides wavered between messages of alarm and reassurance.

If Trump's goal with two days of tough talk was to scare North Korea, Kim, the commander, put that idea quickly to rest. He called Trump's rhetoric a 'load of nonsense' that was aggravating a grave situation.

'Sound dialogue is not possible with such a guy bereft of reason and only absolute force can work on him,' the KNCA report quoted him saying.

Kim said the Guam action would be 'an effective remedy for restraining the frantic moves of the US in the southern part of the Korean peninsula and its vicinity.'

Guam lies about 2,100 miles from the Korean Peninsula and it's extremely unlikely Kim's government would risk annihilation with a pre-emptive attack on US citizens. It's also unclear how reliable North Korea's missiles would be against such a distant target, but no one was writing off the danger completely.

The new specificity from Pyongyang about its plans for a potential attack came as Trump and his top national security aides delivered contrasting messages over North Korea's expanding nuclear capabilities.

As international alarm escalated, Trump dug in on his threats of military action and posted video of his ultimatum to North Korean leader Kim Jong-un.

The suggestion that Trump has enhanced US nuclear firepower was immediately disputed by experts, who noted no progress under Trump's presidency. Still, Trump tweeted, 'Hopefully we will never have to use this power, but there will never be a time that we are not the most powerful nation in the world!'

The tweets did little to soothe concerns that Trump was helping push the standoff with North Korea into uncharted and even more dangerous territory. While the prospect of military action by either side appears slim, given the level of devastation that would ensue, Trump's talk Tuesday of 'fire and fury like the world has never seen' compounded fears of an accident or misunderstanding leading the nuclear-armed nations into conflict.

This week, an official Japanese report and a classified US intelligence document, the latter reported by The Washington Post, combined to suggest the North was closer to being able to strike the United States with a nuclear missile than previously believed. The US document reportedly assessed that the North had mastered the ability to fit a nuclear warhead on its long-range missiles.

After North Korea issued its own warning that suggested it could attack Guam, Secretary of State Rex Tillerson sought to calm the sense of crisis.

Speaking earlier Wednesday on his way home from Asia, he credited Trump with sending a strong message to the North Korean leader on the 'unquestionable' US ability to defend itself, so as to prevent 'any miscalculation.' Tillerson insisted the US isn't signalling a move toward military action, while it pursues a policy of sanctions and isolation of North Korea.

'Americans should sleep well at night,' Tillerson told reporters. He added, 'Nothing that I have seen and nothing that I know of would indicate that the situation has dramatically changed in the last 24 hours.'

No sooner had Tillerson ratcheted down the rhetoric than Defence Secretary Jim Mattis ratcheted it back up.

Echoing Trump's martial tone, Mattis said North Korea should stand down its nuclear weapons program and 'cease any consideration of actions that would lead to the end of its regime and the destruction of its people.' As seldom as it is for a president to speak of using nuclear missiles, the reference to the 'destruction' of a foreign people is equally rare.

It was unclear, however, how serious to take all the war talk. Markets weren't rattled by the back-and-forth threats. Trump had no meetings on his schedule Wednesday. There were no indications from the Pentagon of urgent planning or new assets being hastily deployed to the Pacific region. And Tillerson even made a pre-scheduled refuelling stop in Guam, the target of the North's purported military designs.

Trump's alarmist tone sparked criticism among his political opponents in the United States and concern among allies and partners in Asia - the very nations the United States would need to work with to avert a military showdown with North Korea.

In pictures: North Korea military drill Show all 8 1 /8 In pictures: North Korea military drill In pictures: North Korea military drill North Korea's leader Kim Jong Un watches a military drill marking the 85th anniversary of the establishment of the Korean People's Army (KPA) KCNA/Handout via REUTERS In pictures: North Korea military drill A military drill marking the 85th anniversary of the establishment of the Korean People's Army (KPA) is seen in this handout photo by North Korea's Korean Central News Agency (KCNA) KCNA/Handout via REUTERS In pictures: North Korea military drill A military drill marking the 85th anniversary of the establishment of the Korean People's Army (KPA) is seen in this handout photo by North Korea's Korean Central News Agency (KCNA) KCNA/Handout via REUTERS In pictures: North Korea military drill A military drill marking the 85th anniversary of the establishment of the Korean People's Army (KPA) KCNA/Handout via REUTERS In pictures: North Korea military drill A military drill marking the 85th anniversary of the establishment of the Korean People's Army (KPA) KCNA/Handout via REUTERS In pictures: North Korea military drill This image made from video of still images broadcast in a news bulletin by North Korea's KRT, shows what was said to be a 'Combined Fire Demonstration' held to celebrate the 85th anniversary of the North Korean army, in Wonsan, North Korea. KRT via AP Video In pictures: North Korea military drill This image made from video of still images broadcast in a news bulletin by North Korea's KRT, shows what was said to be a 'Combined Fire Demonstration' held to celebrate the 85th anniversary of the North Korean army, in Wonsan, North Korea. KRT via AP Video In pictures: North Korea military drill This image made from video of still images broadcast in a news bulletin by North Korea's KRT, shows what was said to be a 'Combined Fire Demonstration' held to celebrate the 85th anniversary of the North Korean army, in Wonsan, North Korea. KRT via AP Video

Senate Minority Leader Chuck Schumer said 'reckless rhetoric is not a strategy to keep America safe.' Fellow Democratic Senator Dianne Feinstein said the situation needs diplomacy, 'not sabre rattling.'

China, North Korea's increasingly alienated ally, cautioned all sides against 'employing words or actions that could sharpen differences and escalate the situation.'

One regular critic of Trump's foreign policy stood up for the President. Senator Lindsey Graham, a Republican hawk, said he felt Trump wasn't bluffing with his threat of 'fire and fury.' Trump has 'basically drawn a red line' by saying Pyongyang can't ever have a nuclear-tipped missile capable of striking the US, Graham said.