sanctions, the North's top body for inter-Korean affairs threatened the South with unspecified "physical counter-measures".
"Sanctions amount to a declaration of war against us," the Committee for Peaceful Reunification of Fatherland said in a statement.
"If the South Korean puppet regime of traitors directly participates in the so-called UN 'sanctions', strong physical countermeasures would be taken," it added.
The warning, carried by the official Korean Central News Agency, came a day after North Korea's top military body threatened to conduct a third nuclear test and boost its ability to strike the United States.
The current upsurge in tensions has its roots in Pyongyang's defiant decision to push ahead with a long-range rocket launch on December 12 -- insisting it was a peaceful mission to place a satellite in orbit.
The rest of the world saw it as a banned ballistic missile test and on Tuesday the UN security council unanimously adopted a resolution that expanded the number of North Korean entities on an international blacklist.
The United States, supported by Japan and South Korea, spearheaded the UN resolution.
Pyongyang reacted furiously, vowing to boost its nuclear arsenal and to conduct a third nuclear test and even longer-range rocket launches in an "all-out action" against its "sworn US enemy".
In Washington on Thursday, White House spokesman Jay Carney criticised the North Korean threat as "needlessly provocative" and stressed that any test would be a "significant violation" of UN Security Council resolutions.
"Further provocations would only increase Pyongyang's isolation, and its continued focus on its nuclear and missile programme is doing nothing to help the North Korean people," Carney told reporters.
Outgoing US defence secretary Leon Panetta said the United States was "fully prepared" for a test from Pyongyang.
"But I hope... they determine that in the end, it is better to become a part of the international family," Panetta said.
In addition to the UN measures, the United States added names to its own blacklist that freezes any US-based assets of designated individuals and groups and makes it a crime for anyone in the United States to assist them.
The UN resolution was notable for receiving the backing of North Korea's sole major ally, China, which had shielded Pyongyang from stronger sanctions demanded by Washington.
In an unusually frank warning on Friday, China's state-run media indicated that Beijing would decrease aid to Pyongyang if it goes ahead with a nuclear test.
"If North Korea engages in further nuclear tests, China will not hesitate to reduce its assistance," the Global Times, which is close to China's ruling Communist Party, said in an editorial.
"China hopes for a stable peninsula, but it's not the end of the world if there's trouble there," it added.
As North Korea's main economic lifeline, China is seen as the only country with any genuine leverage over the impoverished, isolated and nuclear-armed state.
Pyongyang has long played on Chinese fears of the consequences of North Korea's collapse to defy Beijing's efforts to rein in its nuclear weapons programme.
Mushrooming trade with China has helped North Korea mitigate the impact of UN sanctions already imposed after Pyongyang's previous nuclear tests in 2006 and 2009.
The Global Times editorial expressed official displeasure at a lack of North Korean understanding of Beijing's role in softening the sanctions outlined in Tuesday's UN resolution.
"It seems that North Korea does not appreciate China's effort," the newspaper said