North Korea says it has thousands of centrifuges operating at a previously undetected uranium enrichment facility it revealed earlier this month.
The North Koreans say the plant is for civil nuclear power. It is not clear whether the centrifuges could be used to produce material for weapons.
A US scientist has seen the facility, but could not confirm it was working.
The claim comes as tensions remain high, after the North shelled a South Korean island a week ago.
Pyongyang says the shelling, which killed four people, was in response to Seoul's military drill near Yeonpyeong island.
It has described a four-day US-South Korean military exercise now under way in the Yellow Sea, near the disputed border between the two Koreas, as a provocation.
The aircraft carrier, the USS George Washington, and four other US navy vessels are being joined by South Korean destroyers, patrol vessels, frigates, support ships and anti-submarine aircraft.
'Stunning'
"At this time, we are actively building a light water reactor and in order to meet the demand, we are operating a modern uranium enrichment system with many thousands of centrifuges," said the official North Korean news agency KCNA, referring to its Yongbyon nuclear complex near the capital Pyongyang.
It is the first time that the North has given details about what it calls its peaceful nuclear programme, says the BBC's Chris Hogg in Seoul.
Earlier in November, US scientist Siegfried Hecker visited Yongbyon and said he was "stunned" by the sophistication of the equipment he was shown.
The North Koreans assured him the centrifuges were working, producing low enriched uranium which would be used as fuel in an experimental light water nuclear reactor they were building.
The North Koreans say they want the reactor to be operational by 2012, a target Mr Hecker has said he thinks is optimistic.
They say they want to use it to produce electricity.
The US scientist reported that the plant did appear to be intended for civilian nuclear purposes; however, he added that it could be modified to produce highly enriched uranium.
This could be used for nuclear weapons, although a lot of work would be needed to build warheads or produce a thermonuclear device.
The boasts are likely to cause further concern in South Korea, whose President Lee Myung-bak on Monday pledged that Pyongyang would "pay the price in the event of further provocations".
He said the South now realised the North would not on its own abandon its nuclear programme, adding that tolerance would "spawn nothing but more serious provocations".
The two Koreas, the US, China, Japan and Russia are involved in six-party talks aimed at defusing the nuclear issue.
They have been stalled since April 2009. South Korea and the US say they should not resume until the North has made a genuine offer on halting its nuclear programme.
