North Korea said on Thursday that it would regard any US move to seek UN sanctions against the communist country as "the green light to a war".

The warning came after South and North Korea agreed to try to peacefully resolve the nuclear crisis, though Pyongyang has said further talks with the United States are useless unless it drops its demand that the North first scrap suspected atomic weapons programs.

North Korea says abandoning such programs would leave it defenceless and has in the past said sanctions would be seen as a step toward war.

Pyongyang "will take self-defensive measures, regarding it as the green light to a war" if Washington seeks a UN resolution authorising economic sanctions against it, North Korea said in a statement on KCNA, its official news agency.

South Korea's Foreign Minister Yoon Young-kwan declined to answer a reporter's question yesterday as to whether the South would support sanctions. He described the issue as a "very delicate and very sensitive".

An unnamed spokesman for the North's Foreign Ministry was quoted as saying by KCNA that recent US aggression compels North Korea "to opt for possessing a necessary deterrent force and put it into practice".

The agreement between the two Koreas pledging to resolve the dispute peacefully was made after four days of talks in Pyongyang. But was unlikely to mark a change in attitude by North Korea. The communist state agreed to similar communiques at previous Cabinet- level talks.

The North has insisted that the South should not meddle in the nuclear standoff, calling it a dispute with the United States.

US Secretary of State Colin Powell said the United States was reviewing an offer by North Korea to give up its missiles and nuclear facilities in exchange for substantial US economic benefits.

The North Koreans floated the proposal in talks with US envoys in Beijing last week. According to a senior US official, North Korea said for the first time during that meeting that it had nuclear weapons and was contemplating exporting them, depending on US actions.

In Beijing, Chinese Foreign Ministry spokesman Liu Jianchao questioned whether North Korea made such an assertion. He said that as far as he knew, they have "not made such a statement".

He added that China, which also participated in the Beijing talks, supports the denuclearisation of the Korean Peninsula but wants North Korea's "legitimate security concerns" to be addressed.

German Chancellor Gerhard Schroeder today urged the United States to exercise restraint in dealing with North Korea, joining Japan in calling for a diplomatic solution.

"We cannot use the same method as in the case of Iraq," Schroeder said after meeting with Japanese Prime Minister Junichiro Koizumi.

North Korea has demanded a nonaggression treaty with the United States. The US administration has ruled out such a move, but says some form of written security guarantee could be possible.

Mr Powell called the Beijing meeting "quite useful", but later told the Senate Foreign Relations Committee that North Korea's proposal was "not going to take us in a direction we need to go".

On Wednesday, North Korea said nuclear talks would be a waste of time if the United States insists that the communist country first scrap its suspected atomic weapons programs before discussing possible economic and diplomatic benefits.