North Korea sees the display of muscle on its border as a deliberate threat
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North Korea has postponed talks with the South, blaming Seoul's "extremely dangerous" heightened defence posture since the start of US-led military action in Iraq.
The move comes a day after Pyongyang complained that joint US-South Korean military exercises showed the US was preparing an invasion of the North.
The talks, on economic exchanges and marine co-operation, had been set to take place on Wednesday.
A top UN envoy, Maurice Strong, has warned that "war could occur" if a diplomatic solution is not found to the crisis over North Korea's nuclear programme.
He has arrived in Beijing after a four-day visit to North Korea.
'Brink of war'
A statement on North Korean state radio accused the South Korean authorities of "picking on us under the pretext of the Iraqi war," and said they had "declared an extremely dangerous high-alert posture".
The statement was attributed to Pak Chang-ryon, the chief North Korean delegate to the inter-Korean economic co-operation committee.
Strong: No need for diplomatic process to be abandoned
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"Right now, we are exerting our utmost... efforts to defend peace and security on the Korean peninsula," it went on.
"In stark contrast to us, [joint military exercises] are madly being staged in South Korea, thereby driving the country's situation to an unpredictable brink of war."
"As long as a party to dialogue wields a sword against its dialogue counterpart, we recognise that we cannot but inevitably postpone" the talks, the statement said, adding that "the South is to blame".
'No need for war'
Mr Strong told reporters that the North was keen to avoid war but that a diplomatic resolution to deadlocked relations was urgently needed, the AFP news agency said.
"There is no need for a war and yet war could occur if the parties concerned cannot find a way of resolving the differences across the table diplomatically," he said.
He said both the North and the US wanted to avoid war.
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CRISIS CHRONOLOGY
16 Oct: US says N Korea admits to a secret nuclear programme
14 Nov: US halts oil shipments to N Korea
22 Dec: N Korea removes monitoring devices at Yongbyon nuclear plant
31 Dec: UN nuclear inspectors forced to leave
10 Jan: N Korea pulls out of anti-nuclear treaty
12 Feb: IAEA refers issue to UN Security Council
27 Feb: US says Yongbyon reactor restarted
March 2: N Korean jets intercept US surveillance plane in international airspace
10 March: N Korea fires second missile into sea
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"I know that they wish to do this. It is simply the method of doing it that now divides them," he said.
Amid the heightened tension, the US has sent 24 long-range bombers to the Pacific island of Guam to deter North Korean aggression.
"It should not be surprising if [North Korean officials] continue these actions which are often interpreted as provocative and do indeed have a provocative element, but the purposes as they describe them are simply to continue their process of preparation for conflict should conflict arise," said Mr Strong.
EU meeting
European Union leaders have agreed that their foreign ministers will hold a special meeting to discuss the Korean crisis.
South Korean and Japanese representatives would be invited, they said.
The Belgian Prime Minister Guy Verhofstadt - who strongly opposed military action in Iraq - said the meeting would strive to avoid the mistakes made in handling the Iraq crisis.
No date has been announced for the meeting.