N. Korea proposes joint probe with US into Sony cyber attack

North Korea called Saturday for a joint investigation with the US into a crippling cyber attack on Sony Pictures, denouncing Washington's "slandering" after President Barack Obama warned Pyongyang of retaliation.

The US blames the isolated state for the hacking which prompted the cancellation of the Christmas Day release of "The Interview", a madcap romp about a CIA plot to kill leader Kim Jong-Un which infuriated North Korea.

Mark Stroh, a National Security Council spokesman, Saturday reiterated the White House's confidence that North Korea was behind the attack on Sony, adding, "if the North Korean government wants to help, they can admit their culpability and compensate Sony for the damages this attack caused".

Pyongyang has repeatedly denied the secretive state was behind the hacking, which led to the release of a trove of embarrassing emails, scripts and other internal communications, including information about salaries and employee health records.

"As the United States is spreading groundless allegations and slandering us, we propose a joint investigation with it into this incident," a foreign ministry spokesman in Pyongyang said.

"Without resorting to such tortures as were used by the US CIA, we have means to prove that this incident has nothing to do with us," the spokesman was quoted as saying by the official Korean Central News Agency (KCNA).

The spokesman threatened "grave consequences" if the US continued to discuss retaliations against North Korea on this matter.

Addressing reporters after the FBI said Pyongyang was to blame, Obama said Washington would never bow to "some dictator".

"We can confirm that North Korea engaged in this attack," Obama said.

"We will respond. We will respond proportionately and we'll respond in a place and time and manner that we choose."

While the president said he was sympathetic to Sony's plight, he also said the movie giant had "made a mistake" in cancelling the release.

Sony defended its decision, made after anonymous hackers invoked the 9/11 attacks in threatening cinemas screening the film, which prompted theatre chains to say they would not risk showing it.

'Acts of intimidation'

North Korea said insults against "our highest authority" would not be tolerated, but it rebuffed the notion of cinema attacks.

"But in case we have to retaliate, we would not carry out terrorist attacks on innocent viewers at movie theatres but stage frontal attacks on those who are responsible for the hostile activities against the DPRK (North Korea) and their headquarters," the spokesman said.

Just before Obama took the podium, the Federal Bureau of Investigation explained how it had concluded that North Korea was to blame.

The attackers used malware to break into the studio and render thousands of Sony Pictures computers inoperable, forcing the company to take its entire network offline, the FBI said.

It said analysis of the software tools used revealed links to other malware known to have been developed by "North Korean actors".

The FBI also cited "significant overlap" between the attack and other "malicious cyber-activity" with direct links to Pyongyang, including an attack on South Korean banks carried out by North Korea.

"Such acts of intimidation fall outside the bounds of acceptable state behavior," the agency said in a statement.

There was "no evidence" that North Korea had acted in concert with another country, Obama said, after reports that China -- Pyongyang's only ally -- had possibly provided assistance.

Chinese state newspaper the Global Times lashed out at "The Interview" on Saturday as "senseless cultural arrogance" in an editorial.

South Korea meanwhile said it noted "the similarities" between the attack and the onslaught on its soil last year.

'Costs and consequences'

Though denying involvement in the brazen November 24 cyber attack, Pyongyang has hailed it as a "righteous deed".

The North's top military body, the National Defense Commission, slammed Sony for "abetting a terrorist act while hurting the dignity of the supreme leadership", according to KCNA.

Hollywood filmmakers urged US authorities to do more to protect them against future cyber attacks, as experts estimated the attack could cost Sony Pictures hundreds of millions of dollars.

"We stand by our ('The Interview') director members Seth Rogen and Evan Goldberg and hope that a way can be found to distribute the film by some means, to demonstrate that our industry is not cowed by extremists of any type," said Directors Guild of America chief Paris Barclay.

Free speech advocates and foreign policy hawks have slammed Sony's decision as cowardice in the face of a hidden enemy.

But Sony vigorously defended the move, and said it still hoped to release the film on a different platform -- perhaps on demand or even online for free.

"We have not caved, we have not given in, we have persevered and we have not backed down," studio boss Michael Lynton told CNN.