N.Korea renews retaliation threats ahead of US envoy trip

North Korea renewed its threats of military retaliation Sunday ahead of a visit to South Korea by a US envoy as Seoul and its allies look to impose fresh sanctions on Pyongyang.

The North will "sternly and mercilessly" punish South Korea over its joint military exercise with the United States, its ruling party newspaper, Rodong Sinmun, said in a commentary referring to a recent show of strength in the waters off the divided peninsula.

"As declared already, we will strongly counter with a retaliatory sacred war of our own based on nuclear deterrent," it said, accusing Seoul of pushing the situation to the brink of war.

Cross-border tensions have risen sharply since South Korea and the United States accused the North in late May of torpedoing a warship near the disputed sea border with the loss of 46 lives.

US and South Korean forces last week wrapped up a four-day naval and air exercise -- the first in a series -- which they said was intended to warn the North against further attacks.

Robert Einhorn, the US State Department's special adviser for non-proliferation and arms control, is set to arrive in Seoul late Sunday for talks on how to enforce sanctions against the North, foreign ministry officials said.

Einhorn will hold a series of talks with South Korean officials Monday, they said.

Washington blacklisted a Macau-based bank that held more than 25 million dollars in North Korean accounts in 2005, accusing the bank of helping Pyongyang launder money.

The blacklisting effectively cut off Pyongyang's access to the international financial system.

The United Nations in June last year tightened sanctions following missile launches and a nuclear test carried out in the North.

Washington announced further sanctions last month to stop the North from selling nuclear weapons or related material as well as blocking money laundering and other illicit activities.

South Korean newspapers, however, say the North's economy is already feeling the pinch from a variety of sanctions and nothing much can be achieved through any further sanctions.

Commentators also doubt the effectiveness of fresh sanctions without cooperation from China, the major provider of fuel, food and other necessities to its impoverished communist neighbour.