UPDATED 8:36am: Barack Obama says the United States is mulling whether to place North Korea back onto its list of state sponsors of terrorism.

The US president's comments come after a US senator said that North Korea had set a dangerous precedent with its alleged cyber attack on Sony Pictures.

The attack on Sony led to the release of embarrassing emails and caused executives to halt the release of the film The Interview.

North Korea has threatened to hit back at the White House and other US targets, if Washington sanctions it over the alleged hacking attack.

The country has again denied involvement in the hacking of Sony Pictures, which prompted executives to halt the release of a film seen by Pyongyang as mocking the North's leader.

But it has praised the hacking as a righteous action by the group called Guardians of Peace.