The threat came as Secretary of State Rex Tillerson said the us was exploring ways to pressure North Korea to the negotiation table over its nuclear program. "I don't know", he told reporters.
The U.S. and South Korea are now engaged in joint Air Force exercises, which North Korea believes to be invasion prep.
North Korea was removed from the list of state sponsors of terror in 2008 as a last-ditch move to save a nuclear deal that was near collapse.
Trump has taken a hard line with North Korean leader Kim Jong Un, who has proceeded with nuclear and missile programmes in defiance of U.N. Security Council sanctions.
While Trump gave no indication of what the moves might be, US officials told Reuters that the United States was aware of a higher-than-usual level of activity by Chinese bombers, signalling a possible heightened state of readiness.
The daily points out that USA threats are meant to keep North Korea from improving its nuclear capabilities.
Tensions have increasingly increased between North Korea and the United States in recent weeks.
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The newspaper said the strike "will completely and immediately wipe out not only USA imperialists' invasion forces in South Korea and its surrounding areas but the US mainland and reduce them to ashes".
Tensions have risen sharply in recent months after North Korea conducted two nuclear weapons tests past year and carried out a steady stream of ballistic missile tests.
The proposed US-drafted statement seen by AFP would have demanded that North Korea "conduct no further nuclear tests" and halt missile launches after Pyongyang carried out a failed test on Sunday.
Pyongyang periodically warns Washington of the dire consequences of taking on North Korea militarily. Hence, the North Korean government orders frequent tests of its nuclear weapons program, in order to verify national defense strategies against possible attacks.
The U.N. Security Council threatened new sanctions against North Korea Thursday in a strongly-worded condemnation of its latest missile launch after the US agreed to a Russian request to include a call for "dialogue" with Pyongyang.
South Korea's Ministry of Foreign Affairs hailed the UNSC action.
"At the end of the day we realized that North Korea is a problem", Haley said.