Satellite imagery indicates a high-level of activity at North Korea's nuclear test site to ensure the facility is always ready for use on any orders from Pyongyang, a US think-tank said.

The US-Korea Institute at Johns Hopkins University said images from July 7 of the Punggye-ri site show what appear to be supplies and/or equipment stacked next to the North Portal where the North conducted its fourth nuclear test in January.

A small vehicle was also at the nearby support building and several mine ore carts may also be present southeast of the portal, suggesting the tunnel was being actively worked.

"Based on imagery alone, it is not possible to determine whether this activity is for maintenance, excavation or preparation for a fifth nuclear test", it said Monday on its website 38 North.

"Nevertheless, it is clear that North Korea is ensuring that the facility is in a state of readiness that would allow the conduct of future nuclear tests should the order come from Pyongyang," it added.

Tensions are high since Pyongyang carried out its fourth nuclear test in January, followed by a series of missile launches.

Pyongyang on Monday threatened to take "physical action" after Washington and Seoul announced they would deploy a sophisticated US anti-missile defence system.

The North's military said it would take "more merciless and powerful successive corresponding measures" against deployment of the Terminal High Altitude Area Defense system (THAAD) in the South.

Pyongyang test-fired what appeared to be a submarine-launched ballistic missile on Saturday, a day after the THAAD announcement.

Also on Monday, the North said it would cut off all diplomatic channels with the US and handle issues related with it under its "wartime law" in protest at sanctions on leader Kim Jong-Un.

The issue of two Americans jailed in the North was "no exception", the North said, indicating it would give up using them as a negotiating card and could treat them harshly.

US State Department spokesman John Kirby on Monday urged Pyongyang to cease the "improper and unjust" detention of the two.

"We call on North Korea to refrain from actions and rhetoric that only further raise tensions in the region", Kirby said at a regular press briefing.

Otto Warmbier, a 21-year-old college student, was sentenced to 15 years' hard labour in March for stealing a propaganda banner from a hotel. Korean-American missionary Kim Dong-Chul is also serving a jail term on charges of subversion and espionage.

The latest sanctions, which described Kim directly responsible for a long list of serious human rights abuses, are the first that name the leader of the isolated, nuclear-armed state.