North Korea on Friday spurned appeals to join talks on its nuclear and missile programs, saying the United States should drop financial sanctions before any negotiations occur. A U.S. envoy said the communist nation was sinking deeper into isolation.

At a conference in Malaysia, North Korea struck a defiant tone as U.S. Secretary of State Condoleezza Rice and top diplomats from other regional powers discussed Asian security matters without their counterpart from Pyongyang.

"I hope that today's gathering will begin the basis for cooperation of a new, regional dialogue that can help us overcome these tensions, help us increase security throughout the region," Rice said before entering the meeting.

CountryWatch: North Korea

She added that the United States hoped for a resumption of stalled six-party talks on North Korea, which also include South Korea, Japan, China and Russia.

"It's unfortunate that the PRK (People's Republic of Korea) has been unwilling to return to the six-party talks," she said. "The United States remains ready at any time, at any place, without any conditions" to resume the talks.

Outside the convention center where they met, hundreds of anti-U.S. protesters broke through a police cordon and marched to the building's entrance. The protesters, mostly members of Malaysia's ruling coalition, raised fists and chanted slogans against Washington's backing of Israel in the Lebanon conflict.

North Korea's efforts to develop nuclear weapons are a source of global concern, and the North deepened the standoff when it test-fired seven missiles earlier this month. At the same time, U.S. sanctions against banks linked to North Korea have sapped the communist country's cash flow.

"The U.S. says it's difficult to lift the financial sanctions, but there is nothing difficult. If the U.S. wants to, it can do it easily," North Korean spokesman Chong Song Il said in Kuala Lumpur. "We believe if the U.S. earnestly wants dialogue, it can do this."

Chong had harsh words for the United Nations, which condemned the missile tests and barred U.N. member states from dealing with North Korea in material or technology for missiles or weapons of mass destruction.

"The missile launches were part of a routine military exercise and a self-defense project," Chong said. "It's brigandish for the U.N. Security Council to take issue with this."

North Korea's foreign minister, Paek Nam Sun, told delegates to the ASEAN Regional Forum that his country might pull out of the security conference attended by 25 countries and the European Union if it condemned North Korean actions, according to diplomats.

"They say there's nothing against their firing the missile, this is their own routine military exercise, there's no law to prevent them from doing that, there is blackmail by one superpower," said Ong Keng Yong, secretary-general of the Association of Southeast Asian Nations.

The North's diplomatic isolation was evident in the decision by the United States and other nations to hold a separate meeting on the sidelines of ARF without Paek, ostensibly to discuss northeast Asian security.

"They are completely isolated," said U.S. Assistant Secretary of State Christopher Hill. "If it's isolation they want, it's going to be isolation they get."

However, Chinese Foreign Minister Li Zhaoxing downplayed the separate meeting in an indication that it was likely to be a show of unity rather than an opportunity to craft policy.

"It's nothing formal, it's just going to be like a tea party," he said.

The sideline meeting included Rice, foreign ministers from countries involved in the six-party talks, and the foreign ministers of Australia, Malaysia, Indonesia, Canada and New Zealand.

The addition of peripheral players in the North Korean standoff was a delicate maneuver to avoid the impression that nations in the six-party process were ganging up on North Korea.

The international community remains divided on how to deal with the communist nation. South Korea, for example, favors engagement with its neighbor, while the South's chief ally, the United States, takes a harder line. China appears to be frustrated with North Korea's belligerence, but does not want to apply pressure that could destabilize the regime there.