North Korean leader Kim Jong Un watched a ballistic missile launch test and ordered the country to improve its nuclear attack capability by conducting more tests, the official KCNA news agency reported on Friday.
The report did not say when the test took place but it was likely referring to North Korea's launch of two short-range missiles on Thursday that flew 500 km (300 miles) and splashed into the sea.
"Dear comrade Kim Jong Un said work ... must be strengthened to improve nuclear attack capability and issued combat tasks to continue nuclear explosion tests to assess the power of newly developed nuclear warheads and tests to improve nuclear attack capability," KCNA said.
The North Korean leader was quoted in state media earlier in the week as saying his country had miniaturized nuclear warheads to mount on ballistic missiles.
Tensions have risen sharply on the Korean peninsula after the North conducted its fourth nuclear test in January and fired a long-range rocket last month leading to the U.N. Security Council to adopt a new sanctions resolution.
Conducting more nuclear tests would be in clear violation of U.N. sanctions which also ban ballistic missile tests, although Pyongyang has rejected them. North Korea has a large stockpile of short-range missiles and is developing long-range and intercontinental ballistic missiles (ICBMs).
South Korea's Unification Ministry spokesman Jeong Joon-hee said: "It's simply rash and thoughtless behavior by someone who has no idea how the world works," when asked about Kim's comments.
U.N. Secretary-General Ban Ki-moon called on Pyongyang to "cease destabilizing acts," adding that Ban remained "gravely concerned" by the situation.
In China, North Korea's most important economic and diplomatic backer, the country's top newspaper, the People's Daily, urged all sides to be "patient and brave", show goodwill and resume the talks process.
South Korea said it did not believe that North Korea had successfully miniaturized a nuclear warhead or deployed a functioning intercontinental ballistic missile.
The U.S. Defence Department said this week it had seen no evidence that North Korea had succeeded in miniaturizing a warhead.
However, Admiral Bill Gortney, the officer responsible for defending U.S. air space, told a U.S. Senate panel on Thursday it was "prudent" for him to assume North Korea could both miniaturize a warhead and put it on an ICBM that could target the United States.
"Intel community gives it a very low probability of success, but I do not believe the American people want (me) to base my readiness assessment on a low probability," he said.
North Korea has issued nearly daily reports in recent days of Kim's instructions to fight South Korea and the United States as the two allies began large-scale military drills.
North Korea called the annual drills "nuclear war moves" and threatened to respond with an all-out offensive. Kim last week ordered his country to be ready to use nuclear weapons in the face of what he sees as growing threats from enemies.
The United States and South Korea remain technically at war with North Korea because the 1950-53 Korean War ended in a truce instead of a peace agreement.