North Korea threatens ahead of U.S. drills

North Korea inflamed already high tensionsover the deadly sinking of a South Korean warship by threatening the United States and South Korea on Friday with a "physical response" if they carry out military drills as planned Sunday.

The U.S. refused to back down,sayingnew talks with the North are unlikely in the current standoff.

The latest threat came four months after the sinking of a South Korean warship that killed 46 sailors. The North has been blamed, but vehemently denies any involvement.

U.S. Secretary of State Hillary Rodham Clinton,in Vietnam for a Southeast Asiansecurity forum, traded barbs with a North Korean officialover the ship incident, themilitary exercises and the imposition of new U.S. sanctions against the North.

Meanwhile, the U.S.-led military command monitoring the ceasefire on the Korean peninsula confronted the North about thesinking of the Cheonan in March, calling it a violation of the armistice that ended fighting in the 1950-53 war.

Colonels from the United Nationscommand, who met at the border with counterparts from the North's army, reminded them of the UN Security Council order to honour the truce. Officers also proposed a joint task force to discuss"armistice violations," the military commission said in a statement.

A team of international investigators concluded in May that a North Korean submarine fired the torpedo that sank the Cheonan. The Security Council approved astatement earlier this month condemning the incident, but did not directly blame Pyongyang.

At the Association of Southeast Asian Nations meeting in Hanoi, North Korean spokesman Ri Tong Il repeated Pyongyang's denial of responsibility for the ship sinking and said the upcoming military drills were a violation of its sovereignty that harkened back to19th-century "gunboat diplomacy."

'Physical response'

The exercises will be "another expression of hostile policy," Ritold reporters. "There will be physical response against the threat imposed by the United States militarily."

Clinton responded by saying the U.S. iswilling tonegotiate with the North butthat this type of threat only heightens tensions. She added that progress in the short term seems unlikely.

"It is distressing when North Korea continues its threats and causes so much anxiety among its neighbours and the larger region," she told reporters. "But we will demonstrate once again with our military exercises that the United States stands in firm support of the defence of South Korea and we will continue to do so."

Shortly before Ri spoke, Clinton had lashed out against belligerent acts by the North, warning that it must reverse a "campaign of provocative, dangerous behaviour" if it wants improved relations with its neighbours and the United States.

She said stability dependson persuading an "isolated and belligerent" North Korea to alter course and return to nuclear disarmament talks which it pulled out of last year.

Members of the U.S. and North Korean delegations did not meet at the annual ASEAN regional forum, which has in the past been a venue for rare talks between the two sides. The 27-country conference 10 ASEAN members pluscountries with major interests in the area such asthe U.S., China, Japan, Russia and North and South Korea expressed "deep concern" over the Cheonan sinking in a joint statement that wasa weakened version of an earlier ASEAN statement.

On Wednesday, Clinton announced in the South Korean capital that the U.S. would slap new sanctions on the North to stifle its nuclear ambitions and punish it for the sinking of the South Korean ship.

The penalties will target the country's elite by taking aim at illicit activities, such as money laundering and counterfeiting cigarettes and cash. On Friday, the European Union said it will also considernew sanctions against the North.

Burma bomb?

Clinton raised concerns about potential atomic collaboration between the North and Burma, also known as Myanmar. Numerous reports in past months have suggested that Burma's military rulers are attempting to develop nuclear weapons with North Korean help.

Clinton lambasted Burma for its dismal human rights record and called on itsjunta to hold free and fair elections this year and to release political prisoners, including Nobel Peace laureateAung San Suu Kyi.

Clinton's comments on Myanmar echoed those of previous U.S. administrations, butcome as President Barack Obama has made a push for expanded engagement with Southeast Asia.

In an indication ofincreased involvement in the region, Clinton said "the United States has a national interest" in resolving conflicting claims over the Spratly and Paracel island chains in the South China Sea, particularly between China and Vietnam. She said the disputes interfere with maritime commerce, hamper access to international watersand undermine the UN Law of the Sea.

Her comments were likely to anger China, which asserts sovereignty over the whole South China Sea, but Clinton said the U.S. does not support any country's sovereignty over the islands. She said the U.S. is willing to work with all the parties, including Vietnam, Taiwan, Malaysia, Brunei, and the Philippines, to help negotiate an end to the disputes.