North Korea severed its military hotline with South Korea on Wednesday, breaking the last direct communication link between the two countries at a time of heightened military tensions.

The decision coincided with an announcement that the North's top political leadership would meet in the next few days to discuss an unspecified "important issue" and make a "drastic turn".

The hotline move was relayed by a senior North Korean military official to his South Korean counterpart just before the link was severed.

"Under the situation where a war may break out any moment, there is no need to keep up North-South military communications," the official was quoted as saying by the official Korean Central News Agency.

"From now, the North-South military communications will be cut off," he said.

Several weeks ago North Korea severed the Red Cross hotline that had been used for government-to-government communications in the absence of diplomatic relations.

Severing the military hotline could affect operations at the Seoul-funded Kaesong industrial complex just north of the border because it was used to organise movements of people and vehicles in and out.

The industrial estate -- established in 2004 as a symbol of cross-border cooperation -- has remained operational despite repeated crises in relations.

"We are negotiating with the North to prevent any operational issues," an official from the Kaesong management committee said, adding the North has yet to block movements of people to and from Kaesong.

The South's unification ministry urged the North to retract its action, saying it was not good for "stable operation" of the complex where more than 50,000 North Koreans work at small labour-intensive South Korean plants.

Cutting the hotline was the latest in a series of threats and actions that have raised tensions on the Korean peninsula since the North's long-range rocket launch in December and its nuclear test last month.

Both events triggered UN sanctions that infuriated Pyongyang, which has spent the past month issuing increasingly bellicose statements about unleashing an "all-out war".

The United States denounced the hotline move as a "provocative" step.

"It's very important for (North Korea) to focus on what we think is the right course of action, and that is peace and stability on the Korean peninsula, and their provocations and bellicose rhetoric aren't helpful in the situation," Pentagon spokesman George Little said.

US State Department acting deputy spokesman Patrick Ventrell said Washington remained in close contact with its allies in the region as the situation unfolds.

A communications channel, which allows contact between North Korea and the United States even though they have no diplomatic ties, also remained open, he said.

Earlier Wednesday the North announced an imminent meeting of its ruling party politburo and launched a scathing attack on South Korea's new president, Park Geun-Hye.

A North Korean state committee accused Park of slander and provocation after she made a speech warning the North that failure to abandon its nuclear weapons programme would result in its collapse.

In Seoul, some analysts suggested the North was fast running out of threats and targets for its invective as it sought to bully the international community into negotiating on Pyongyang's terms.

"They are upping the rhetorical ante in every possible way, but the international community is not reacting as it had hoped," said Cho Han-Bum, an analyst at the Korea Institute for National Unification.

Cho said the coming politburo meeting would probably seek to keep "the momentum going" through some symbolic gesture.

Although North Korea is a past master of brinkmanship, there are concerns in South Korea and beyond that the current situation is so volatile that one accidental step could escalate into serious conflict.

On Tuesday the North's military put its "strategic" rocket units on combat alert, with a fresh threat to strike targets on the US mainland, Hawaii and Guam, as well as South Korea.

The US said its forces were ready to respond to "any contingency". Japan, which hosts a number of US bases, said its government was "on full alert".

N. Korea to hold meeting of top leaders: report
Seoul (AFP) March 27, 2013 - North Korea's top leaders are to meet in the coming days to decide on an unspecified "important" issue, official media said Wednesday, as tensions simmer on the Korean peninsula.

The Political Bureau of the Communist Party's Central Committee will convene its plenary meeting before the end of March to "discuss and decide an important issue for victoriously advancing the Korean revolution", the Korean Central News Agency said.

KCNA did not specify the date for the meeting, which will also reportedly make a "drastic turn" in accomplishing the North's Juche (self-reliance) revolutionary cause.

Analysts in Seoul said decisions on issues concerning security, international relations and reshuffle of personnel were likely to be made at the meeting and approved by the North's rubber-stamp parliament, meeting on April 1.

"They will discuss how to handle the nuclear issue, inter-Korean relations and North Korea's long-standing demand for a peace treaty with the United States," Professor Yang Moo-Jin of the University of North Korean Studies in Seoul told AFP.

Yang said Jang Song-Thaek, uncle of North Korea's leader Kim Jong-Un, could be appointed as prime minister with the task of resuscitating the country's struggling socialist economy.

There could also be changes in the make-up of the powerful Presidium of the Political Bureau.

Vice Marshall Hyon Yong-Chol, the chairman of the Joint Chiefs of Staff, could join the body, which would further strengthen the military's say over key state affairs, said Yang.

Angered by UN sanctions imposed after its nuclear test in February, Pyongyang has issued a wave of threats over the past month -- ranging from a surgical military strike to nuclear war.

North Korea's military put its "strategic" rocket units on a war footing Tuesday, with a fresh threat to strike targets on the US mainland, Hawaii and Guam, as well as South Korea.

The move came as South Korea marked the third anniversary of the sinking of its naval vessel "Cheonan" by what Seoul insists was a North Korean submarine.

In the latest sign of tensions, a South Korean soldier standing on guard at the inter-Korean border threw a grenade towards a moving object in the dark early Wednesday, sparking a short-lived alarm, the defence ministry said.

At daylight, a patrol searched the area but there was no trace of any infiltration from North Korea, a ministry spokesman said.

A precautionary alert, which had been issued for South Korean units in the northeastern county of Hwacheon, was consequently lifted.