North Korea traditionally marks New Year's Day with a joint editorial by the country's three major newspapers representing its communist party, military and youth militia force. Outside observers pore over the statement to find indication of the reclusive country's policy direction.

'We should continue to put utmost efforts to building up the country's military strength in line with the requirements of the prevailing situation and the development of the revolution,' said the editorial, carried by the country's Korean Central News Agency.

North Korean leader Kim Jong Il upholds a 'military-first policy' in which the country places its top priority in strengthening its 1.2-million-member armed forces, the backbone of his totalitarian rule over the country's 23 million people.

'The sophisticated and seasoned leadership of leader Kim Jong Il is the main source of all victories and miraculous achievements,' the editorial said.

Tension on the Korean peninsula has run high since a pro-US, conservative government took office in Seoul in February with a pledge to take a tough line on the North. They worsened last month after the North restricted traffic at the countries' border, expelled some South Koreans from a joint industrial zone and suspended a tour program to the ancient North Korean city of Kaesong.

The North Korean editorial criticised the South Korean government for an 'anachronistic confrontation policy' aggravating relations between the two countries.

The statement briefly mentioned the country's nuclear program - a source of a regional tension.

'The independent foreign policy of our Republic to denuclearise the Korean peninsula and defend peace and security of Northeast Asia and the rest of the world is demonstrating its validity more fully as the days go by,' it said.

International disarmament talks ended in a stalemate last month over North Korea's refusal to put into writing commitments on inspecting its past nuclear activities. That blocked progress on an aid-for-disarmament agreement reached last year.

The editorial did not include the country's usual accusations against the United States, an indication the country may hope to build up ties with the incoming government of President-elect Barack Obama.

The North's state media has routinely accused the US of plotting a war against the North and demanded Washington withdraw its 28,000 troops from South Korea.

The US has said it has no intention of attacking the North and its military presence in South Korea is aimed at deterring aggression from North Korea.

Mr Obama during his election campaign has sought to emphasise his willingness to hold direct talks with the North - including possibly meeting with leader Kim Jong Il.

The North's editorial also vowed to rebuild its shattered economy and resolve its chronic food shortages on its own.

The North said it will focus on the metal, power, coal, mining and rail transport industries to help boost its economy.

North Korea has relied on foreign assistance to feed its people after natural disasters and economic mismanagement devastated its economy in the mid-1990s. -- AP