North Korea on Saturday threatened a 'powerful nuclear deterrence' in response to joint US-South Korean naval exercises starting this weekend, Pyongyang's state media said. North Korea was prepared for a 'retaliatory sacred war', the North's National Defence Commission (NDC) said in a statement, carried by the official Korean Central News Agency (KCNA), reported AFP. The United States and South Korea have announced joint naval exercises, beginning on Sunday, in what they have described as a bid to deter North Korea's 'aggressive' behaviour. 'All these war manoeuvres are nothing but outright provocations aimed to stifle the Democratic People's Republic of Korea (North Korea) by force of arms to all intents and purposes,' the NDC said.'The army and people of the DPRK will legitimately counter with their powerful nuclear deterrence the largest-ever nuclear war exercises to be staged by the US and the South Korean puppet forces. ' The comments came after North Korea on Friday threatened a 'physical response' to the exercises while the United States accused Pyongyang of waging a campaign of provocation. The war of words dominated an Asia-Pacific security forum summit in Hanoi attended by US Secretary of State Hillary Clinton and North Korean Foreign Minister Pak Ui-Chun on Friday.Tension is high on the Korean peninsula over the sinking of a South Korean warship in March, which claimed 46 lives. South Korea and the United States, citing findings from a probe involving local and foreign experts as well, accuse the North of torpedoing the warship near the disputed Yellow Sea border. North Korea denies involvement. In a show of force, the two allies announced a major joint naval exercise starting Sunday for a four-day run, involving 200 aircraft and 20 ships including an aircraft carrier in the Sea of Japan (East Sea). The South's defence ministry said it would be the first in a series of about 10 joint naval drills in coming months. The United States also announced further sanctions aimed at stopping the cash-strapped North from selling nuclear weapons or related material as well as blocking money laundering and other illicit activities. But the NDC on Saturday warned that the North, which carried out its first atomic test in 2006, would build up its own nuclear deterrence.'The more desperately the US imperialists brandish their nukes and the more zealously their lackeys follow them, the more rapidly the DPRK's nuclear deterrence will be bolstered up ... and the more remote the prospect for the denuclearisation of the Korean Peninsula will be become,' it said. North Korea last year stormed out of six-nation talks in which it had agreed to end its nuclear programme in return for security guarantees and aid.