Amid large-scale South Korean military drills near the border with North Korea, a top official from the North warned against intrusion into its territory, threatening war and citing possible use of nuclear weapons, while an unofficial U.S. ambassador said the situation was like a tinderbox.

North Korean defense chief Kim Yong Chun said his country was making preparations to begin a sacred war at any time.

If the enemies intrude into the sky, land and seas of the DPRK even by 0.001 mm, the [Korean People's Army] will as ever continue dealing more devastating physical blows at them without hesitation, Kim said, according to North Korean state media.

The North Korean defense minister was making a speech to mark the 19th anniversary of the country's leader Kim Jong Il's gaining control of the army.

The statements come as South Korea stages large-scale military exercises in mountainous training grounds of the city of Pocheon, in Gyonggi, a province adjacent to the highly fortified de-militarized zone separating both countries.

About 800 troops conducted drills involving jets and artillery units about 19 miles south of the North Korea border, according to South Korean reports.

Earlier in the week South Korean Marines held an artillery drill on Yeonpyenong Island, near the maritime border between the two countries in the Yellow Sea.

South Korean President Lee Myung-bak, visiting a frontline army unit at his country's eastern border on Thursday, said the show of force was necessary.   

I thought patience would bring peace to this land but I was wrong, he said. I realized that tough actions enable us to keep peace, deter provocations and prevent war.

New Mexico Gov. Bill Richardson, a former U.S. Ambassador to the United Nations who has returned from an unofficial peace keeping trip to the North this week, said in a published report on Thursday that the situation in the Korean peninsula was still a tinderbox.

During his trip, Richardson urged North Korea to show restraint as the South Korean drills took place. He said diplomacy was needed to get us out of this tinderbox.

Richardson said he gave them a lot of grief during his trip, saying he wasn't an apologist.

Maybe I was a little dose of reality, he said. [B]ut now it's up to governments to step in.