SEOUL– Relations on the divided Korean peninsula plunged to their lowest point in a decade Tuesday when?Pyongyang declared it was cutting all ties to Seoul as a punishment for accusing it of sinking a warship.

The announcement came a day after the Republic of Korea (ROK)took steps that were seen as among the strongest it could take short of military action. Seoul said it would slash trade with?the Democratic People's Republic of Korea (DPRK)?and deny permission to its cargo ships to pass through ROK waters. It also resumed propaganda broadcasts across the border in retaliation for the deadly sinking of a warship.

Seoul has accused the DPRK of sinking its warship, the Cheonan, in March, and ROK President Lee Myung-bak has called for sanctions against Pyongyang.

A KCNA editorial said Lee's proposal was based on retaliation and warned that the ROK moves would put the Korean Peninsula on the verge of war.

DPRK?was cutting all ties with the South until President Lee Myung-bak leaves office in early 2013, the?Korean Central News Agency said Tuesday.

A spokesman of the Committee for the Peaceful Reunification of Korea announced that the DPRK decided to take "resolute measures" to totally freeze the inter-Korean relations, abrogate the agreement on non-aggression between the two sides and completely halt inter-Korean cooperation, the spokesman said.

Among the eight measures to be taken in the first phase, all the relations with the ROK will be cut off, and the work of the Panmunjom Red Cross liaison representatives will be suspended.

ROK personnel in the Kaesong Industrial Zone will be expelled, it added.

"The passage of South Korean ships and airliners through the territorial waters and air of the north side will be totally banned," said the statement.The fact that the United States and the ROK discussed jointly staging large-scale anti-submarine maneuvers in the West Sea later this year showed the real intention of the "theory of retaliation" was to prepare for aggression against the DPRK, the editorial said.

Lee on Monday demanded an apology from the DPRK and said his country would resort to self defense in case of further military provocation by the DPRK.

The Cheonan, a 1,200-ton warship with 104 crew members on board, sank on March 26 after an explosion, killing 46 sailors.

The ROK's restarting of psychological warfare operations was among measures it announced on Monday, along with slashing trade, to punish Pyongyang.

UN Secretary-General Ban Ki-moon said Monday he expects the Security Council to take action against the DPRK, calling the evidence that Pyongyang was responsible "overwhelming and deeply troubling."

The US has thrown its full support behind the ROK's moves to retaliate, which also include bringing the DPRK before the UN Security Council.

While US Secretary of State Hillary Rodham Clinton was in Beijing conferring with officials on a coordinated response, China's top nuclear envoy huddled with ROK officials in Seoul.

ROK's military resumed radio broadcasts airing Western music, news and comparisons between the two Koreas' political and economic situations late Monday, according to the Joint Chiefs of Staff. The military also planned to launch propaganda leaflets on Tuesday to inform people from the DPRK about the ship sinking.

In coming weeks, the ROK also will install dozens of propaganda loudspeakers and towering electronic billboards along the heavily armed border to send messages enticing DPRK soldiers to defect.

The action, which ends a six-year suspension, is expected to draw an angry response from the DPRK. The country's military already warned Monday it would fire at any propaganda facilities installed in the Demilitarized Zone.

The ROK will hold an anti-submarine drill this week in waters off the west coast of the Korean Peninsula, Seoul's Yonhap News Agency on Tuesday quoted Navy officials as saying.