The announcement coincided with a visit to Asia by chief U.S. envoy for the North, Stephen Bosworth, to discuss ways to bring Pyongyang back to long-stalled negotiations on giving up its efforts to build a nuclear arsenal.
"Experimental uranium enrichment has successfully been conducted to enter into completion phase," the KCNA news agency quoted North Korea's United Nations delegation as saying in a letter to the head of the U.N. Security Council (UNSC).
The United States has long suspected the North of having a secret program to enrich uranium for weapons. Experts have said it has not developed anything near a full-scale enrichment program.
The North said its latest moves were in response to tighter sanctions.
Those sanctions have hurt the impoverished North's arms trade, one of its few significant exports, and analysts said it may be angered its latest attempts at conciliation with the outside world have been largely rebuffed.
"Now they are taking the road that they know will drive a response out of all countries—the military way—and leaving them to decide what to do," said Cho Myung-chul, a specialist on the North at the Korea Institute for International Economic Policy.
Weaponising
North Korea added that reprocessing of spent nuclear fuel rods was at its final phase and extracted plutonium was being weaponised.
"We are prepared for both dialogue and sanctions. If some permanent members of the UNSC wish to put sanctions first before dialogue, we would respond with bolstering our nuclear deterrence first before we meet them in a dialogue."
In another move that serves as a reminder of the tension on the divided peninsula, a North Korean patrol vessel crossed briefly into the South's waters Friday but returned without incident, the South's Joint Chiefs of Staff said.
"They are taking a mixed strategy, which I would call the sweet and sour approach. This keeps their adversaries guessing and it makes it more difficult to formulate policy," said Peter Beck, research fellow at Stanford University and a specialist on Korean affairs.
Market players, used to North Korea blowing hot and cold, said the latest rumblings had little impact on early trading.
Pyongyang laid the blame squarely on the U.N. Security Council for sanctioning its rocket launch in April and ignoring one by South Korea late last month.
"Had the UNSC, from the very beginning, not made an issue of the DPRK's (North Korea's) peaceful satellite launch in the same way as it kept silent over the satellite launch conducted by South Korea on August 25, 2009, it would not have compelled the DPRK to take strong counteraction such as its 2nd nuclear test.
Launch Questions
Pyongyang said its launch was to put a communications satellite into space. Others said it was to test a ballistic missile with the potential to hit U.S. territory.
The North has already tested two plutonium-based nuclear devices, the one in May triggering tightened international sanctions.
It reiterated its opposition to six-nation talks over its nuclear weapons program, talks it walked away from last December.
"We have never objected to the denuclearization of the Korean Peninsula and of the world itself. What we objected to is the structure of the six-way talks which had been used to violate outrageously the DPRK's sovereignty and its right to peaceful development."
Those talks included the two Koreas, China, Russia, Japan and the United States and offered Pyongyang massive aid and an end to isolation if it gives up its efforts to build an atomic arsenal.
North Korea in the past month released two U.S. journalists and a South Korean worker and fishermen it had held in separate incidents. It has also ended border restrictions it placed on the South and sought to resume frozen business projects with its neighbor.
