North Korea demanded on Thursday that South Korea apologise for what it called insults during major anniversary festivities, or face a "sacred war".
The North staged mass celebrations to mark the 100th anniversary Sunday of the Day of the Sun, the birthday of deceased founding president Kim Il-Sung.
A controversial rocket launch last Friday was to have been a centrepiece, but the projectile exploded some two minutes after blast-off.
"The puppet regime of traitors must apologise immediately for their grave crime of smearing our Day of Sun festivities," said a joint statement by the North's government, party and various social groups on the website of the official news agency.
Otherwise, it said, the North Korean people and military "will release their volcanic anger and stage a sacred war of retaliation to wipe out traitors on this land".
The statement hit back at comments by the South Korean President Lee Myung-Bak and conservative media.
Lee had said the launch cost an estimated $850 million, which could have been used by the hungry state to buy 2.5 million tons of corn.
"Traitor Lee Myung-Bak took the lead in vituperation during the festivities," the statement said.
"This is an intolerable insult to our leader, system and people and a hideous provocation that sparked seething anger among the whole people."
The North has several times demanded that the South apologise or face war since its longtime leader Kim Jong-Il died in December. Under his son and new leader Kim Jong-Un, it has struck a hostile tone with the South.
The North said its rocket was to put a peaceful satellite into orbit. The United States and other nations called it a pretext for a long-range missile test banned under UN resolutions.
Washington said it also breached a bilateral deal with Pyongyang and suspended plans for food aid.
The North has warned of unspecified retaliation, accusing the US of a hostile attitude. Some experts believe it will conduct a new nuclear test, while others predict a border clash with the South.