NORTH Korea has abandoned the truce that ended the Korean War and warned it could launch a military attack on the South, two days after testing an atomic bomb for the second time. The announcement came amid reports that the secretive North, which outraged the international community with its bomb test on Monday, was restarting work to produce more weapons-grade plutonium. The North's latest display of anger was prompted by the South's decision to join a US-led international security initiative. Defying global condemnation, the regime of Kim Jong-Il said it could no longer guarantee the safety of US and South Korean ships off its west coast and that the Korean peninsula was veering back towards war. "Those who have provoked us will face unimaginable merciless punishment,'' a military spokesman said, blaming Washington and Seoul for the latest turn of events. It said its military would "no longer be bound'' by the 1953 armistice that ended hostilities in the Korean War, in which the United States fought with the South. With no binding ceasefire, it said, "the Korean peninsula will go back to a state of war''. It also said the North "will not guarantee the legal status'' of five South Korean islands near the disputed inter-Korean border in the Yellow Sea, which was the scene of bloody naval clashes in 1999 and 2002. Analysts played down the likelihood of a full-scale conflict between North and South Korea but said clashes near the sea border were possible. The White House said it viewed Pyongyang's threats as "sabre-rattling and bluster'' that would only deepen its isolation, with spokesman Robert Gibbs saying that "threats won't get North Korea the attention it craves''. Analysts say Kim Jong-Il, 67, is likely carrying out shows of strength to reassert his control in the impoverished state. He reportedly had a stroke in August, which has renewed questions about who might succeed him. Meanwhile, South Korean reports said that steam was seen coming from a plant at the North's main nuclear facility at Yongbyon - a sign it was trying to produce more plutonium.