The brutal dictator made the chilling threat after the US and South Korea staged a joint navel drill involving nearly a dozen warships.
"The prevailing situation where a great war for national reunification is at hand requires all the KPA (Korean People's Army) units to become (elite) Guard Units fully prepared for war politically and ideologically, in military technique and materially," he told troops according to Korean Central News Agency (KCNA).
Kim, who commands one of the world's largest armies, told his forces to train so they can "tear to pieces the Stars and Stripes" – a reference to the American flag.
The US and South Korean drills were a prelude to an eight-week exercise called Foal Eagle which will involve air, ground and navy field training.
It will also involve some 200,000 South Korean and 3,700 US troops.
Both Washington and Seoul insist the military exercises are defence-based in their nature.
It was recently revealed that North Korea could have as many as 100 nuclear weapons by 2020.
A report released by a US research institute predicted the rogue state's nuclear arsenal could dramatically increase in the next five years.
The report's author, Joel Wit, said: "This is a pretty scary scenario."
Sung Kim, U.S. Special Representative for North Korea Policy, told a Washington seminar said concern over North Korean advances was driving international diplomatic efforts "to find a credible path to negotiation so that we can stop North Korea's development of their nuclear capabilities."
He said Washington was "under no illusions" about North Korea's willingness to denuclearize voluntarily and would "continue to apply pressure both multilaterally and unilaterally" though sanctions to increase the cost of failing to do so
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