North Korea's neighbours have expressed deep concern at Pyongyang's claim it is ready and able to produce nuclear bombs.
North Korea says diplomacy over its nuclear programme has failed
South Korean President Roh Moo-hyun said that the North's statement on Thursday was "a bombshell announcement".
Japanese Foreign Minister Yoriko Kawaguchi said it was regrettable that Pyongyang had broken a promise it made after six-party talks on the issue last month not to escalate tensions.
Pyongyang said on Thursday it had reprocessed 8,000 spent nuclear fuel rods and added on Friday that it had overcome "technical difficulties" in using the plutonium extracted from the rods for weapons purposes.
But despite his concern, Mr Roh stressed it was important for the international community to remain calm.
"If we react too sensitively, it could only aggravate the already tense situation," he said.
Mr Roh repeated his qualms about complying with the US request that South Korea send troops to Iraq while the Korean peninsula was so tense.
"What is of most concern is that unexpected things might break out once we decide to send troops (to Iraq) such as a failure to hold a second round of six-way talks or North Korea taking a tough stand with nuclear arms and missile issues," he told reporters.
North Korea's neighbours are trying to bring about fresh multilateral talks with Pyongyang on the nuclear crisis after a six-party dialogue ended without substantive progress in August.
Pyongyang said this week that it had no interest in further talks.
The Deputy Foreign Minister of Russia, one of the nations that took part in the August negotiations, urged North Korea on Friday not to rule out more diplomacy.
"Any talks are better than war," Mr Losyukov said, according to the Interfax news agency.
Both South Korea and the US have said they are unable to verify North Korea's claims on its nuclear progress.
Washington stressed the matter was of "serious concern", but Secretary of State Colin Powell said North Korea had made the same claim twice before and the US would "not react to each and every one of their statements, which seems to be a repeat of the previous statement".
Mr Powell said Washington would continue to work with South Korea, Japan and China to try to persuade North Korea to abandon its nuclear ambitions.
Earlier this week, South Korea and the US said they expected follow-up talks to the inconclusive discussions held with the North in August, although Pyongyang says it has not agreed to hold a second round.
"All the technological matters have been solved fully in the process of making switchover in the use of plutonium", the North Korean news agency KCNA said in a statement on Friday.
The statement also said the country "will reprocess, without delay when necessary, more spent fuel rods to be produced in an unbroken chain from the five-megawatt nuclear reactor in Yongbyon".
Thursday's foreign ministry statement said that the fuel rods had been reprocessed as part of the reactivation of its nuclear facilities for "peaceful purposes".
But, the ministry added that since relations with the US deteriorated, it had "changed the purpose" of the rods.