Kim Jong-un's North Korean regime has become increasingly belligerent: it conducted its fourth nuclear test on January 6 and launched a ballistic missile earlier this month.
South Korea now fears its neighbour is preparing to carry out terrorist attacks on its soil.
President Park Geun Hye's Government has proposed an anti-terrorism law that would give the security forces powers to counter any threat.
Making the case for this law, Kim Sung Woo, a senior official in the president's office, said North Korea had decided to "muster anti-South terrorist capabilities that can pose a direct threat to our lives and security".
Kim added that the risk of terrorist attacks sponsored by North Korea was "increasing more than ever".
The North has already carried out terrorist attacks, notably in 1987 when a bomb destroyed a South Korean airliner, killing 115.
But there have been no serious incidents in recent years and some experts doubt whether the North poses a threat of this kind.
One Western observer said yesterday that any offensive was more likely to take the form of a cyber attack, rather than a terrorist bombing.
South Korea's National Intelligence Service has briefed members of the ruling Saenuri party, giving them an assessment of the North's intentions, which backed up Kim's statement.
The targets of attacks could be defectors, government officials or campaigners against the regime.
Meanwhile, seismologists have warned that North Korea's repeated nuclear tests could trigger the eruption of Mount Paektu, a volcano found only 115 kilometres from the site where four weapons have been detonated.
The volcano spans the border between North Korea and China, meaning an eruption could affect both countries.
Experts have detected increasing seismic activity beneath the peak - coinciding with the period after nuclear tests - suggesting that the volcano's magma chamber is expanding.
Their paper, published in the journal Nature, noted that one of Paektu's previous eruptions was among "the largest explosive events in human history".
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