The UN Security Council on Thursday slammed tough new sanctions on North Korea amid escalating tensions as the isolated regime threatened a pre-emptive nuclear strike against the United States.

Washington said it was "fully capable" of defending itself against any North Korean attack as international powers rallied behind the fourth round of UN punishment of Pyongyang.

After an accord between US and Chinese negotiators, the 15-member Security Council unanimously added new names to the UN sanctions blacklist and tightened restrictions on North Korea's financial dealings, notably its suspect "bulk cash" transfers.

Ahead of the meeting, North Korea bitterly condemned South Korean-US military exercises and said its army would "exercise the right to a pre-emptive nuclear attack to destroy the strongholds of the aggressors."

North Korea now faces one of the toughest UN sanctions regimes ever imposed after nuclear tests in 2006, 2009 and on February 12, as well as a long-range rocket launch in December.

The Security Council's Resolution 2094 threatened "further significant measures" if the North stages a new nuclear test or rocket launch.

The new sanctions will "bite hard," said US ambassador Susan Rice. "They increase North Korea's isolation and raise the cost to North Korea's leaders of defying the international community."

China wants "full implementation" of the resolution, said its UN envoy Li Baodong, while stressing that efforts must be made to bring North Korea back to negotiations and to defuse tensions.

Russia's UN ambassador Vitaly Churkin also called for "cool heads" to bring North Korea back to six-nation talks on Pyongyang's nuclear weapons drive.

UN Secretary General Ban Ki-moon, a former South Korean foreign minister, said the resolution sent an "unequivocal message" to North Korea that "the international community will not tolerate its pursuit of nuclear weapons."

The resolution expressed "gravest concern" over the February 12 test and adds three new individuals, a government science academy and trading company to the UN blacklist for a travel ban and assets freeze.

The resolution also called for "enhanced vigilance" over North Korean diplomats. US officials suspect the North's diplomats have been carrying suitcases of cash to get around financial sanctions.

It said a ban on financial transactions linked to the North's weapons programs must include "bulk cash" transfers.

Earlier resolutions gave states the right to inspect cargo suspected to contain weapons material. Those inspections will become mandatory.

The Security Council had also banned exports of luxury goods but this resolution for the first time specifically named jewelry, yachts, and luxury and racing cars as items that must be banned.

"North Korea's ruling elite -- who have been living large while impoverishing their people -- will pay a direct price for this nuclear test," said Rice.

The North's foreign ministry said that adoption of the resolution would fast-track Pyongyang's plans to carry out promised "powerful" countermeasures.

It blasted the United States and South Korea over joint military exercises which have just started in the South.

The North said earlier that it would withdraw on Monday from the armistice that halted the 1950-53 Korean War.

A foreign ministry spokesman warned that a second Korean war was "unavoidable", with Washington and Seoul refusing to cancel their military exercise.

"Now that the US is set to light a fuse for a nuclear war, (our) revolutionary armed forces... will exercise the right to a pre-emptive nuclear attack to destroy the strongholds of the aggressors," the spokesman said in a statement carried by the Korean Central News Agency.

"Let's be clear: We are fully capable of dealing with that threat," said White House spokesman Jay Carney in response.

US Senator Bob Menendez told the Senate Foreign Relations Committee that it would be "suicide" for the North to stage such an attack.

In the past, the North has threatened attacks on US forces in South Korea and also claims to possess long-range missiles capable of carrying a nuclear warhead to the continental United States.

North Korean state television showed a massive military and civilian rally held Thursday in Pyongyang's giant Kim Il-Sung square.

The rally was addressed by senior military and party officials who denounced the United States and warned that Washington would reap the consequences of its "aggression".