Tensions have been running high on the divided Korean peninsula since the North carried out its fourth nuclear test in January and followed up with a series of missile tests.
South Korea responded last month by announcing deployment of the US Terminal High Altitude Area Defense (THAAD) system - a move which sparked domestic protests as well as complaints from China.
"I urge the North Korean government to immediately stop all provocations and threats targeting South Korea as well as the development of weapons of mass destruction," said President Park Geun-Hye in a televised Liberation Day speech.
Stressing that "true liberation" would involve reunification of the peninsula, Park said that could only happen by removing the fear of nuclear weapons, missiles and war.
She also warned the North that all attempts to provoke and intimidate the South would be counter-productive.
"The more efforts (the North) makes, the deeper the country's isolation in the international community will be and the bigger its economic problems will be," she said
The North's nuclear test in January resulted in a substantial strengthening of UN sanctions, but a defiant Pyongyang doubled down with a series of ballistic missile tests also banned by UN resolutions.
The planned missile shield has been condemned not only by Pyongyang but also Beijing, which views the deployment as a US move against its own national security interests and a threat to regional stability.
"The deployment of THAAD is an act of self-defence," Park said in her speech, adding that her priority as president was to "protect the lives of our people from the reckless provocations of the North".
THAAD has also hit domestic opposition, particularly from those living in the rural county of Seongju where the first battery will be installed.
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