North Korea warns of nuclear war, says U.S. should back up counterfeiting charges

North Korea on Saturday warned of nuclear war and vowed to strengthen its deterrent forces, as it demanded that Washington show evidence backing its allegation that the communist regime is counterfeiting U.S. money.

"Dark clouds of a nuclear war are hanging low over the Korean Peninsula," the North's official Rodong Sinmun newspaper said in a commentary carried by the state-run Korean Central News Agency.

"The ever-more frantic moves of the U.S. to ignite a new war against (North Korea) would only compel it ... to bolster its deterrent for self-defense in every way," it said.

The North has repeatedly accused the U.S. of planning to attack. Washington has denied any such intention.

The North's comments Saturday follow a South Korea-U.S. agreement this month giving American troops more flexibility in the South.

The North said the pact was aimed at preparing for war.

Also Saturday, the North dismissed U.S. accusations of counterfeiting and other illicit activities like drug trafficking.

"The nature and mission of (North Korea) do not allow such things as bad treatment of the people, counterfeiting and drug trafficking to happen in it," KCNA said.

A pro-North Korean newspaper in Japan also urged Washington to prove its allegation that North Korea is counterfeiting U.S. currency.

"If there is suspicion and clear evidence as claimed by the United States, (the U.S.) can present it and prove (it)," the Choson Sinbo newspaper said.

The United States "continues to leak plausible information but the reality is that there is nothing to confirm the fact objectively," it said.

The newspaper sometimes acts as an unofficial mouthpiece for the reclusive, communist North.

North Korea has recently stepped up criticism of the United States for imposing sanctions over its alleged illicit activities.

Washington in September slapped restrictions on a bank in the Chinese territory of Macau, saying it had helped the North distribute counterfeit money and engage in other illicit activities.

A month later, Washington imposed sanctions on eight North Korean companies it said were fronts for proliferating weapons of mass destruction.

The North has refused to return to international talks on its nuclear weapons program until Washington ends the sanctions.

The U.S. has dismissed the threat, saying the sanctions are unrelated to the nuclear issue.

On Friday, South Korean Foreign Minister Ban Ki-moon said there were indications that the six-country negotiations over the North's nuclear programs could resume in February.

The last session of the talks, which involve the two Koreas, the U.S., Japan, China and Russia, was held in November. They have not produced a significant breakthrough since they stalled over the North's anger at the U.S. sanctions, AP reported. V.A.