North Korea threatened "powerful nuclear deterrence" on Saturday in response to military drills supported by the U.S. and held by South Korea.
The National Defense Comission of North Korea, headed by their leader Kim Jong-il, declared that they would "counter with their powerful nuclear deterrence the largest-ever nuclear war exercises to be staged by the U.S. and the South Korean puppet forces" in a "retaliatory sacred war."  Ri Tong-il, an official with North Korea’s delegation to the ASEAN security forum, had said earlier that they would show a "physical response" to the drills.  Though Japan sent four military observers in apparent support of the drills, China criticized the plans.
Tensions had recently become especially high in both sides of Korea after the sinking of the warship Cheonan in South Korean waters, killing over 40 people. An international investigation concluded that the warship was sunk by a North Korean torpedo. North Korea still strongly denies any involvement in the incident, calling the results "fabricated" and refusing to apologize. "If anyone should apologize," said Ri, "it should be South Korea, responsible for driving the situation on the Korean peninsula to the brink of an explosion."
Despite this, on 25 July 2010, the US and South Korea began their major military drills together in the Sea of Japan.

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North Korea warns of nuclear action