N Korea's known nuclear programme is based around its Yongbyon plant
North Korea has entered the final phase of uranium enrichment, the country's state media has reported.
"Uranium enrichment tests have been successfully carried out and that process is in the concluding stage," the North's KCNA news agency said.
Uranium enrichment would give Pyongyang a second way to make a nuclear bomb - but it also said it was continuing to reprocess and weaponise plutonium.
The UN passed tougher sanctions after a nuclear test by Pyongyang in May.
Both that test and an earlier nuclear test by North Korea in 2006 were understood to have been carried out with plutonium.
The worry is that uranium enrichment is a process that can be easily hidden, and in addition, North Korea has ample natural reserves of the raw material, says the BBC's John Sudworth in South Korea.
KCNA reported that North Korea's delegation at the United Nations had written to the UN Security Council, saying Pyongyang was now ready "for both sanctions and dialogue".
"Reprocessing of spent fuel rods is at its final phase and extracted plutonium is being weaponised," it said.
"If some permanent members of the UN Security Council wish to put sanctions first before dialogue, we would respond with bolstering our nuclear deterrence first before we meet them in a dialogue," the delegation said.
South Korea's Foreign Ministry condemned what it calls "threats and provocative acts."
The United States' special envoy for North Korea, Stephen Bosworth, said the enrichment claim was "of concern".
"Obviously, anything that the North is doing in the area of nuclear development is of concern to us," he said.
North Korea has gone from completely denying that it was enriching uranium just three months ago to admitting processing, says our correspondent.
The statement may seem to be at odds with recent gestures from Pyongyang that many observers saw as an attempt to lower tensions.
But South Korea's defence minister warned in June that "it is clear" the North was going ahead with plans to enrich uranium.
Lee Sang-hee said an uranium enrichment programme would be far easier to hide than reprocessing plutonium from spent fuel rods, as it can be conducted in a space as small as 600 sq metres (6,500 sq feet).
North Korea's plutonium programme is based on the Yongbyon reactor, which is under US satellite observation.
Observers say the US has long suspected the existence of a secret uranium enrichment programme in the North, though experts say it remains little-developed.
But recently, the secretive communist nation has made more conciliatory gestures on the world stage.
Two US reporters and a South Korean worker were released from detention and Pyongyang said it was interested in resuming cross-border tourism and industrial projects with the South.
Less than two weeks ago, the first meeting between officials from the North and South for nearly two years took place unexpectedly in the South's capital, Seoul.
However, the KCNA report indicates the North is unhappy that the UN allowed South Korea to launch a satellite last month, having condemned its own rocket launch in April.
The communique also reiterated Pyongyang's opposition to continuing the long-running six-party talks, involving the two Koreas, China, Russia, the US and Japan, on the nuclear issue.
"We have never objected to the denuclearisation of the Korean Peninsula and of the world itself," it said.
"What we objected to is the structure of the six-way talks which had been used to violate outrageously [North Korea's] sovereignty and its right to peaceful development".
Pyongyang has in the past said it is open to direct talks with the US, but US Secretary of State Hillary Clinton said in June that the six-party talk framework was "the appropriate way to engage with North Korea".
Correspondents said Pyongyang's latest remarks appeared to seek once again to ratchet up tensions on the Korean peninsula.