The United States insisted it was seeking to peacefully resolve differences with North Korea even as it condemned Pyongyang for maintaining a secret nuclear weapons programme.
It has emerged that Washington confronted Pyongyang earlier this month with evidence about a secret programme to enrich uranium for nuclear weapons.
The US administration said Pyongyang's continuing effort clearly violated a number of international agreements, and suspended talks.
The development could create a new crisis in Asia if it sparks new tensions between North and South Korea, disrupts warming ties between Pyongyang and Tokyo and results in the North aggressively producing nuclear weapons, which US President George W. Bush has vowed to curb.
Washington is also forced to confront the revelation as it is seeking to build international support for confronting Iraq's Saddam Hussein and threatening to attack Iraq if he refuses to disarm. Officials claim Saddam possesses chemical and biological weapons and is trying to develop a nuclear arms capability.
Mr Bush in January said North Korea was a member of an "axis of evil," along with Iraq and Iran.
But State Department spokesman Mr Richard Boucher said: "We seek a peaceful resolution of this situation.
"Everyone in the region has a stake in this issue and no peaceful nation wants to see a nuclear-armed North Korea. This is an opportunity for peace-loving nations in the region to deal, effectively, with this challenge," he said.