"Externally, North Korea appears to show that it remains firm (despite an international sanctions regime). The country is likely to continue to stick to its dual policy of nuclear and economic development," Lee Eugene, a ministry vice spokesperson, told a regular press briefing.

Lee was referring to North Korea's signature "byongjin policy" of pursuing nuclear weapons in tandem with economic growth.

North Korea has been pushing for the housing project in an apparent bid to show tough international sanctions do not work.

"The construction of Ryomyong Street was a grand battle to crush the sanctions (against North Korea)," Rodong Sinmun, the country's main newspaper, said Friday.

Pyongyang held the ceremony, attended by ruler Kim Jong-un, in front of about 200 foreign journalists who were invited to North Korea ahead of the key national holiday.

The move came amid heightened tensions that the North could conduct its sixth nuclear test or launch missiles around its major anniversaries in April. Concerns are also growing over Washington's possible pre-emptive strike against the North to counter its provocations.

"The government is gearing for full readiness as North Korea could make provocative acts at any time upon the leadership's decision," Lee added. (Yonhap)