N. Korea warns of nuclear war; Trump says US is 'locked and loaded'

U.S. President Donald Trump issued a new threat to North Korea on Friday, saying the U.S. military was "locked and loaded" as Pyongyang accused him of driving the Korean Peninsula to the brink of nuclear war.

Trump kept up the war of words on Twitter shortly after the North Korean state news agency, KCNA, put out a statement blaming him for the escalated tensions.

"Trump is driving the situation on the Korean peninsula to the brink of a nuclear war, making such outcries as 'the U.S. will not rule out a war against the DPRK,'" KCNA said.

The U.S. president, who is vacationing at his Bedminster, New Jersey, golf resort, described American military readiness in stark terms.

"Military solutions are now fully in place, locked and loaded, should North Korea act unwisely," he wrote on Twitter. "Hopefully Kim Jong Un will find another path!"

Trump maintained pressure on the North after a week of incendiary rhetoric including his warning on Tuesday that the United States would unleash "fire and fury" on Pyongyang if it threatened the United States.

U.S. allies in the region reacted with alarm to the unusual response from Washington and senior U.S. officials scrambled to play down his comments.

Still, Trump amplified the warning on Thursday, saying maybe his "fire and fury" threat "wasn't tough enough." U.S. Defense Secretary James Mattis later tempered Trump's harsh words, saying the United States still preferred a diplomatic approach to the North Korean threat. A war would be "catastrophic," he said.

Asked if the United States was prepared to handle a hostile act by North Korea, Mattis said: "We are ready."

As of late Thursday, two U.S. officials said the threat with regards to North Korea had not changed, additional assets were not being moved into the region and intelligence did not show indications of North Korea preparing a missile launch.

Chairman of Joint Chiefs of Staff Joseph Dunford left Washington on Thursday to visit Japan, China and South Korea. While the trip has been long planned, the issue of North Korea is likely to be a priority, officials said.

Tension in the region has risen since the reclusive North staged two nuclear bomb tests last year and launched two intercontinental ballistic missile tests in July in defiance of world powers. Trump has said he would not allow Pyongyang to develop a nuclear weapon capable of hitting the United States.

RUSSIA, CHINA PLAN

As Pyongyang and Washington traded threats, Russia and China weighed in.

In Moscow, Russian Foreign Minister Sergei Lavrov said on Friday that risks of a military conflict over North Korea's nuclear program are very high and Moscow is deeply worried by the threats from Washington and Pyongyang.

Lavrov encouraged Pyongyang and Washington to sign up to a joint Russian-Chinese plan, under which North Korea would freeze its missile tests and the United States and South Korea would impose a moratorium on large-scale military exercises.

"The side that is stronger and cleverer" should take the first step to defuse the crisis, said Lavrov, speaking live on state television at a forum for Russian students.

Earlier in Beijing, a Chinese state-run newspaper said on Friday that China should remain neutral if North Korea launches an attack that threatens the United States, sounding a warning for Pyongyang over its plans to fire missiles near the U.S. Pacific territory of Guam.

Asian equity markets sank again on Friday and European stocks looked set for their worst week this year because of the tensions.

"This situation is beginning to develop into this generation's Cuban Missile crisis moment," ING's chief Asia economist, Robert Carnell, said in a research note. "While the U.S. president insists on ramping up the war of words, there is a decreasing chance of any diplomatic solution."

China, North Korea's most important ally and trading partner, has reiterated calls for calm. Beijing has expressed frustration with both Pyongyang's repeated nuclear and missile tests and with behaviour from South Korea and the United States, such as military drills, that it sees as increasing tensions.

"China should also make clear that if North Korea launches missiles that threaten U.S. soil first and the U.S. retaliates, China will stay neutral," the Global Times, which is widely read but does not represent government policy, said in an editorial.

"If the U.S. and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so," it said.

China's Foreign Ministry repeated a call for all parties to speak and act cautiously and do more to ease the situation, rather than going down the "old path" of exchanges of shows of force and continually rising tension.

North Korea's state-run KCNA news agency said on Thursday its army would complete plans in mid-August to fire four intermediate-range missiles over Japan to land near Guam.

Trump said Kim was not going to get away with his "horrific" comments and disrespecting America.

"Let's see what he does with Guam. He does something in Guam, it will be an event the likes of which nobody's seen before, what will happen in North Korea," Trump told reporters on Thursday in New Jersey, without offering specifics.

The United States and South Korea remain technically still at war with North Korea after the 1950-53 Korean conflict ended with a truce, not a peace treaty.

(By James Oliphant and Ben Blanchard; Additional reporting by Doina Chiacu and Idrees Ali in Washington, Dustin Volz in San Francisco, Tim Kelly in TOKYO, Christine Kim in SEOUL, Martin Petty in GUAM, Kim Coghill in SINGAPORE; Writing by Writing by Doina Chiacu and Raju Gopalakrishnan; Editing by Clarence Fernandez and Bill Trott)