Kim Jong-Un reportedly tells his forces to prepare for military action as tensions continue to rise on the Korean Peninsula.
North Korea's leader has ordered its military to be fully ready for war, according to a South Korean news agency.
It comes after Seoul said North Korea fired a shell across the border into South Korea, which responded with multiple rounds of artillery fire.
Kim Jong-Un declared a "quasi-state of war" after convening an emergency meeting of the communist country's military leaders, Yonhap reported North Korean TV as saying.
The North had earlier threatened military action if the South continued pumping propaganda into the North across the border using loud speakers.
Anti-Pyongyang statements have been broadcast across the frontier in recently.
The North is believed to have been aiming the shell at one of the loudspeakers.
The suspected projectile landed in an area of the demilitarised zone (DMZ) around 35 miles (60km) north of Seoul.
In response, South Korea fired tens of 155mm artillery rounds at the location where the shell came from, the country's defence ministry said.
There were no reports of any injuries on either side of the border.
North Korea denied provoking the exchange of fire, accusing Seoul of using what it called a "nonexistent pretext".
North Korean Central Television said: "Commanders of the Korean People's Army were hastily dispatched to the front-line troops to command military operations to destroy psychological warfare tools if the enemy does not stop the propaganda broadcast within 48 hours and prepare against the enemy's possible counteractions."
The United States expressed concern about the situation and urged the communist nation to refrain from threatening regional security.
US State Department spokeswoman Katrina Adams told Yonhap: "The United States is concerned by the DPRK's (North Korea) firing of a projectile into the ROK (South Korea).
"The United States remains steadfast in its commitments to the defense and its allies, and will continue to coordinate closely with the ROK."
The US Department of Defence said it was monitoring the Korean Peninsula closely and the UN said it was following tensions "with serious concern".
About 28,500 American troops remain stationed in South Korea, with the US having retained bases following the end of the Korean War in 1953.
The three-year Korean conflict was ended by a ceasefire, rather than a peace treaty, technically maintaining a state of war.
South Korea said it would take preemptive action if required to stabilise its markets during the heightened tensions.