The Bush administration once again rejected North Korea's (search) demand for bilateral talks on its nuclear weapons program, one day after the reclusive country admitted it had produced atomic bombs.

"It's not an issue between North Korea and the United States. It's a regional issue," White House press secretary Scott McClellan said on Friday. "And it's an issue that impacts all of its neighbors."

An administration official, asking not to be identified, raised the possibility of reviving an attempt begun in 2003 to place the issue before the U.N. Security Council (search).

The more hawkish elements of the administration advocate bringing the North Korea issue before the council, which withheld action after the six-party process got under way. North Korea was put on the council agenda after it evicted U.N. nuclear inspectors and withdrew from the Nuclear Non-Proliferation Treaty.

The objective in referring the issue to the council would be to impose international sanctions to persuade Pyongyang to abandon its weapons program.

But those who oppose sanctions say that North Korea is already so cut off from the world in terms of trade that only its starving citizens who depend on food aid would really suffer.

In Sapporo, Japan, Japanese Prime Minister Junichiro Koizumi came down firmly against the possibility of sanctions, saying they could end any possibility that Pyongyang might rejoin the six-nation talks and end any chance of their success.

"I understand the feelings behind growing calls for economic sanctions, but dialogue and pressure are important," Koizumi told reporters.

The latest development in the nuclear standoff prompted a flurry of diplomatic activity. Vice President Dick Cheney and South Korean Foreign Minister Ban Ki-moon held a previously scheduled meeting at the White House, in which they "reaffirmed our shared view that North Korea must end its nuclear weapons program," McClellan said.

Ban is in Washington and is scheduled to meet with Secretary of State Condoleezza Rice next week. Consultations are already under way with China, a senior U.S. official said.

The United States is urging its negotiating partners not to get rattled, said this official, speaking on condition of anonymity. South Korea also urged the allies to keep in mind that bluster is part of Pyongyang's modus operandi, and that the news on the bombs wasn't exactly a shock.

Jack Pritchard, a Korea expert who left the State Department in 2003 because of disagreement with U.S. policies, said North Korea may have decided against resuming the six-party process because of the absence of positive U.S. signals recently.

In the second Bush administration, "the lineup is looking pretty bleak" for North Korea, Pritchard said. Rice included North Korea as one of six "outposts of tyranny," during her confirmation hearing three weeks ago, Pritchard noted.

He also said North Korea may have concluded that keeping its nuclear weapons may be the safest course. He pointed out that India and Pakistan have good relations with the United States and other countries despite the nuclear testing both carried out in 1998.

On the other hand, Pritchard said, the United States attacked non-nuclear Iraq in 2003. The sequence of events, he said, may fall into the category of "lessons learned" for North Korea.

Little Progress in Talks

Pyongyang blames the conflict over its nuclear program (search) on Washington. Korean officials first reportedly admitted the nation had resumed its program two years ago. North Korean officials later denied it was building nuclear weapons, accusing the Americans of misinterpreting their statements.

On Thursday, the communist holdout boldly confirmed its nuclear weapons program. The United States has long assumed the country already had a small number of weapons.

The Bush administration insists that the best format for talks with North Korea includes its neighbors and allies: South Korea, Japan, China and Russia.

Arranging a fourth round of talks aimed at persuading Pyongyang to abandon its nuclear weapons programs has proved difficult. The last round was held in June. In additional to the visit of the South Korean delegation, a Japanese group will arrive for strategic consultations later next week.

In an interview with a South Korean newspaper Friday, North Korea's U.N. envoy demanded bilateral talks with the United States.

"We will return to the six-nation talks when we see a reason to do so and the conditions are ripe," Han Sung Ryol told Seoul's Hankyoreh newspaper in an interview published Friday. "If the United States moves to have direct dialogue with us, we can take that as a signal that the United States is changing its hostile policy toward us."

Han's suggestion came as the 2-year-old standoff over North Korea's nuclear weapons programs plummeted to a new low.

In Thursday's announcement — its first public disclosure that it has the weapons — North Korea said its arsenal is a deterrent against a U.S. invasion, and it does not intend to join six-nation disarmament talks anytime soon.

U.S. officials believe North Korea may have from four to two dozen nuclear devices, depending on the assumptions used about the bombs' designs. There are an estimated 22 nuclear facilities in 18 locations in the mountainous country, and defectors have reported numerous underground weapons labs as well.

Most experts agree that even a missile attack on South Korea's capital would be devastating to that country. South Korea — which is still technically at war with its neighbor — has batted around the idea of moving its seat of government out of Seoul and further down the peninsula.

Escalating tensions on the peninsula have also led the United States to respond. Nearly a third of the 37,000 American troops stationed along the Demilitarized Zone (search) are slated to leave the Korean peninsula starting in 2005. Defense Secretary Donald Rumsfeld is also expected to order remaining troops moved further south and out of North Korea's immediate striking range.

North Korea sees its nuclear programs as a way of ensuring the survival of leader Kim Jong Il's (search) regime. In return for giving up its nuclear ambitions, it seeks massive aid, diplomatic recognition, an end to economic sanctions, and a nonaggression treaty with the United States.

But as a resolution seems to move further into the horizon, there are growing concerns that the impoverished country has turned to the global black market.

Pakistani scientist A.Q. Khan (search) has admitted selling Pyongyang sensitive technology and information. And last week, the New York Times reported that North Korea has sold reprocessed uranium to Libya. Government scientists are currently trying to determine if other countries, including Syria and Iran, were also clients.

North Korea's long-running strategy has been to try to engage the United States in bilateral talks, believing such meetings would boost the isolated country's international status and help it win bigger concessions.

In the current six-nation talks, North Korea has increasingly found itself surrounded by countries, including allies China and Russia, who are critical of its nuclear ambitions. Since 2003, the United States, the two Koreas, China, Japan and Russia have held three rounds of talks in Beijing, but no significant progress has been made.

Former President Clinton forged a bilateral deal in 1994 obligating North Korea to freeze its nuclear activities in return for oil and other aid. But Bush administration officials say the old deal was a failure that should not be repeated because North Korea flouted it by running a secret uranium-enrichment program.

They champion a new six-nation multilateral deal that could bind the North with commitments to China and Russia. China's aid and trade keep North Korea's economy from collapsing.

When asked whether the North's announcement would cause friction with Beijing, Han said his country has "always made our decisions independently based on our own judgment and on our own national interest."

"We are not affected by outside countries' pressure, mediation and persuasion. In fact, we believe that China will help persuade the United States to abandon its hostile policy toward us," he said in the interview.

Governments around the world have expressed concern over North Korea's nuclear statement and urged it to return to talks. But North Korea says it will not do so as long as Washington maintains its "hostile" policy toward the North.

"The key is a change in the hostile U.S. policy toward the North's move appears to be aimed at improving its negotiating power."

But he warned "the problem could get very serious if North Korea takes additional actions," Uri Party spokesman Lim Jong-suk said.

South Korea's take on North Korea's announcement reflects its decades-long experience in dealing with North Korean officials, who pepper their negotiating rhetoric with shouts, threats and dire warnings of imminent clashes.

Since the nuclear crisis erupted in late 2002, North Korea has steadily increased the stakes. It first removed U.N. seals on its mothballed nuclear facilities, expelled the last U.N. nuclear monitors and quit the Nuclear Nonproliferation Treaty (search). It later said it completed reprocessing 8,000 spent fuel rods to extract weapons-grade plutonium.

FOX News' Jane Roh and The Associated Press contributed to this report.