North Korean leader Kim Jong-Un has ordered further nuclear tests, state media said Friday, as military tensions surge on the Korean peninsula with South Korean and US forces engaged in large-scale joint exercises condemned by Pyongyang.

Since the joint drills began Monday, the North has issued daily warnings and statements, talking up its nuclear strike capabilities and threatening to turn Seoul and Washington into "flames and ashes."

Just days after he was photographed posing in front of what state media described as a miniaturised nuclear warhead, Kim said the weapon required further testing.

Overseeing a ballistic missile launch on Thursday, Kim ordered "more nuclear explosion tests to estimate the destructive power of the newly produced nuclear warheads," the North's official KCNA news agency said.

Experts are divided as to just how far the North may have gone in shrinking warheads to a size capable of fitting on a ballistic missile -- a major step forward in strike capability that would present a heightened threat to South Korea, other countries in the region and, eventually, the US mainland.

- Nuclear strike drill -

According to KCNA, Thursday's launch of two short-range ballistic missiles, which traversed the eastern part of the country before falling into the East Sea (Sea of Japan), was part of a nuclear strike exercise.

The aim was to simulate conditions for "exploding nuclear warheads from the preset altitude above targets in the ports under enemy control," the agency said.

Watching the exercise, Kim reiterated an earlier threat to launch an immediate nuclear attack if the "sabre-rattling" South Korea-US drills should harm "even a single tree or a blade of grass" on North Korean territory.

"I will issue a prompt order to launch attack with all military strike means," he said.

Military tensions on the divided Korean peninsula have been on the rise since the North carried out its fourth nuclear test in January, followed by a long-range rocket launch last month.

South Korea and the United States responded by scaling up their annual joint drills, which Pyongyang has always condemned as provocative rehearsals for invasion.

- 'Decapitation' strike -

The North's anger has been fuelled this year by reports that the drills included a "decapitation strike" scenario in which the North Korean leadership and command structure is taken out at the start of any conflict.

In light of such drills, "our self-defensive countermeasures should adopt a more preemptive and offensive mode," Kim said.

The UN Security Council responded to the North's latest nuclear test and rocket launch by adopting tough, new sanctions, which Pyongyang condemned as a "gangster-like" provocation orchestrated by the United States.

Reacting to Kim's call for more nuclear tests, South Korea on Friday said the North Korean leader was being "rash" and displaying his ignorance of international opinion.

"The international community is imposing strong and comprehensive sanctions and this only goes to prove why they are necessary," said Unification Ministry Spokesperson Jeong Joon-Hee.

UN Secretary-General Ban Ki-moon on Thursday voiced grave concern over the growing tensions, and urged North Korea to avoid any further "destabilising acts."

Kim, however, chose to highlight the need for a diversified nuclear strike force, capable of delivering warheads from the ground, air, sea and underwater.

The North has conducted a number of what is says were successful tests of a submarine launched ballistic missile.

Outside experts have questioned the results of those tests, suggesting Pyongyang had gone little further than a "pop-up" test from a submerged platform.