Kim, wearing a Western-style grey suit and tie, said in his customary annual address his country had achieved the historic feat of "completing" its nuclear forces and added he has a nuclear button on his desk.
Kim said he would consider sending a delegation to the Winter Olympics Games in Pyeongchang, South Korea, in February.
North Korea's leader has used his New Year message to warn the United States that he has a "nuclear button" on his desk - which is always in reach. On Saturday, North Korea said it had no plans to alter the course of its nuclear weapons development in the coming year, but Kim's latest remarks suggest that he may in fact be more receptive to Moon's proposal than he looks. Relations between the Koreas have plunged as North Korea has expanded its weapons programs amid a hard-line stance by Moon's conservative predecessors.
In that context, there was little in Kim's speech to suggest that President Donald Trump's bellicose rhetoric and uncompromising position on North Korea have succeeded at intimidating him into submission, but his combination of nuclear saber-rattling at the USA with an overture of reconciliation to South Korea could provide some clues as to Pyongyang's diplomatic strategy going forward.
He used the message to warn the United States that the country is now in range of his nuclear warheads.
Talks could provide a temporary thaw in strained inter-Korean ties, but conservative critics worry that they may only earn the North time to flawless its nuclear weapons. "This year we should focus on mass-producing nuclear warheads and ballistic missiles for operational deployment".
"Kim Jong Un's strategy remains the same".
He said the North might also be using its potential Olympic participation as a chance to show its nuclear program is not meant to pose a threat to regional peace.
"The Winter Olympic Games that will be held soon in the South will be a good opportunity to display the status of the Korean nation and we sincerely wish that the event will be held with good results", Kim said.
An official from South Korea's Foreign Ministry said the 5,100-ton KOTI and its crew members were being held at Pyeongtaek-Dangjin port on the country's west coast amid an inspection over supposed "North Korea-related" activity. Yet he insisted that both North and South Korea "should make efforts". The U.S. "should accurately be aware that this is not a threat but a reality".
But he also hinted at diplomatic overtures to South Korea amid increasingly crippling sanctions.
"The U.S. should know that the button for nuclear weapons is on my table", he said during the speech, as provisionally translated by the AP.