"Without a peace treaty it is impossible to defuse the military confrontation on the Korean Peninsula and it can never be denuclearized unless this confrontation is put to an end," a Foreign Ministry spokesman was quoted as saying by the North's Korean Central News Agency.

"The justice of the DPRK's proposal for concluding a peace treaty has been proved once again," the unidentified spokesman said, criticizing Washington and Seoul for launching the Key Resolve and Foal Eagle joint drill "aimed at mounting a preemptive attack" on Pyongyang.

DPRK is an acronym of the Democratic People's Republic of Korea, North Korea's formal name.

The spokesman was quoted as saying that Pyongyang is "fully ready for dialogue and war," and that the country "will continue bolstering up its nuclear deterrent as long as the U.S. military threats and provocations go on."

The annual military exercises come amid a flurry of diplomacy aimed at resuming the stalled six-party denuclearization talks, which North Korea quit in April last year.

"This cannot be interpreted otherwise than a grave provocation," the spokesman said. "It is an act of chilling the efforts to realize the denuclearization of the peninsula."

North Korea wants U.N. sanctions lifted and peace talks with the United States before it rejoins the six-way talks involving the two Koreas, China, Japan, Russia and the United States.

"Military threat and economic sanctions cannot go with dialogue based on equality and they are incompatible with the process for denuclearization, in particular," the spokesman said.