SEOUL (AFP) - North Korea said Wednesday it was abandoning the truce that ended the Korean war and warned it could launch a military attack on the South, two days after testing an atomic bomb for the second time. The announcement came amid reports the secretive North, which outraged the international community with its bomb test Monday, was restarting work to produce more weapons-grade plutonium. Defying global condemnation, the regime of Kim Jong-Il said it could no longer guarantee the safety of US and South Korean ships off its west coast and that the Korean peninsula was veering back towards a state of war. The Norths anger was provoked by the Souths decision to join a US-led international security initiative, established after the September 11 attacks to stop the spread of weapons of mass destruction. Those who have provoked us will face unimaginable merciless punishment, said the military statement on the official Korean Central News Agency, blaming Washington and Seoul for the latest turn of events. The PSI, which now groups 95 nations, provides for the stopping of vessels to ensure they are not carrying weapons of mass destruction or the components to make them. The South announced it was joining on Tuesday. Any tiny hostile acts against our republic, including the stopping and searching of our peaceful vessels... will face an immediate and strong military strike in response, the North Korean statement said. It said its military would 'no longer be bound by the 1953 armistice that ended the Korean war - in which the United States fought on the side of the South - because Washington had drawn its 'puppet Seoul into the PSI. With no binding ceasefire, it said, the Korean peninsula will go back to a state of war. It also said the North will not guarantee the legal status of five South Korean islands near the disputed inter-Korean border in the Yellow Sea, which was the scene of bloody naval clashes in 1999 and 2002. Analysts played down the likelihood of a full-scale conflict between North and South Korea but said clashes near the sea border were possible. South Koreas defence ministry said no reinforcements were being sent to the region. The military is maintaining its defence posture as strongly as usual, a spokesman told AFP.