The bizarre video, broadcasted on the country’s state media channel Uriminzokkiri TV, shows superimposed footage of missiles blowing up military ships and planes.
It was published after a statement was released by North Korea in response to continued military drills carried out by the US and South Korea.
Leader Kim Jong-Un had released a comment saying North Korea would reduce the US to “ashes” if “a single bullet” was fired at his country.
The video clip shows fake footage depicting a US military carrier and a bomber plane both on fire.
The voiceover reportedly announced that “a knife will be stabbed into the throat of the carrier, while the bomber will fall from the sky after getting hit by a hail of fire”.
Yohap News reported that the propaganda channel then announced that the on-going military drills between South Korea and the US have “given up all pretenses of being a defensive operation and instead have openly stated the intent to assassinate the North's leadership”.
According to the agency, the video narrator added: “This can only be viewed as a declaration of war.”
Jong-Un’s government announced that the country had successfully tested a rocket engine on Sunday that showed “meaningful” signs of progress in relation to launching missiles in the future.
The previous statement, realeased earlier this month from Kim Jong-Un's Foreign Office, said: "The Korean People's Army will reduce the bases of aggression and provocation to ashes with its invincible Hwasong rockets tipped with nuclear warheads and reliably defend the security of the country and its people's happiness in case the US and the south Korean puppet forces fire even a single bullet at the territory of the DPRK."
President Donald Trump on Sunday criticised the North Korean leader saying he was "acting very, very badly."
His comments were made as he departed is Mar-a-Lago resort in Florida, where he spent the weekend enagaged in meetings about North Korea.