"The Treasury Department's very careful in going through, accumulating and analyzing this evidence in coordination with other parts of the US government," State Department spokesman Sean McCormack told reporters.

A North Korean foreign ministry spokesman claimed on Monday that evidence supplied by the United States to justify financial sanctions on the Stalinist state for alleged counterfeiting and money-laundering activities had turned out to be "baseless" fiction.

Pyongyang insists that the sanctions, targeting the flow of hard currency to North Korea, are a major roadblock to six-party talks aimed at ending a three-year standoff with the United States over its nuclear weapons program.

McCormack defended the financial sanctions and said there would be no let up in actions against any illicit financial activities by North Korea.

"We are going to continue to take those steps. And we believe that any other country would take steps to protect itself, to act to prevent or stop illicit activity," he said.

"Whether that's counterfeiting or whether that's money laundering or engaging in drug trafficking or the trafficking in illicit military technologies, the United States is going to take actions to prevent that," he added.

The US Treasury Department in September told US financial institutions to stop dealing with a Macau bank, Banco Delta Asia, which it accused of being a front for North Korean counterfeiting.

A month later the US blacklisted eight North Korean companies allegedly involved in the spread of weapons of mass destruction.

The sanctions are effective because they restrict the flow of hard currency to North Korea's ruling elite, while sparing ordinary people, analysts say.

North Korea said Washington must lift the sanctions for the nuclear talks to resume among the United States, the two Koreas, Russia, China and Japan.

Pyongyang argued that the sanctions breached the spirit of a September pact secured at the Beijing-hosted talks, in which North Korea agreed in principle to disband its nuclear weapons program in return for economic and diplomatic benefits.

US Secretary of State Condoleezza Rice said last week the US sanctions were justified, noting the absence of protests from the international community.

"There hasn't been much uproar from anybody else about the fact that we are engaged in trying to constrain these illicit activities," she said.

The nuclear standoff between Pyongyang and Washington ignited in 2002 when the United States accused North Korea of running a secret uranium-enrichment program.

North Korea responded by throwing out UN International Atomic Energy Agency weapons inspectors and abandoning the Nuclear Non-Proliferation Treaty.

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