The commentary, an annual event in the North, was published in newspapers and read on state TV, The New York Times reported. It said North Korea has been "consistent in its stand and will to achieve peace in Northeast Asia and denuclearization of the whole of the Korean peninsula."
The relationship between the two countries has become increasingly difficult this year. A South Korean naval vessel sank in March and an investigation blamed North Korea; in November two civilians and two South Korean Marines were killed in the shelling of a disputed island and South Korea carried out a number of military drills, some with the United States.
War on the peninsula would bring "nuclear holocaust," the editorial said, calling instead for "an atmosphere of dialogue and cooperation."
The editorial said if North Korea is provoked its military would take "prompt, merciless and annihilating action."
North Korea is one of the poorest countries in the world. The editorial called for major economic advances by 2012, the 100th anniversary of Kim Il-Sung's birth.
"We should launch an all-out, vigorous offensive for a breakthrough to realize the wish of the President to build a prosperous country," it said.
Kim Il-Sung died in 1994 but is still referred to as North Korea's president.