But Millerwise also stressed that nothing had been decided yet on the Treasury's response after North Korea sparked international condemnation by test-firing seven missiles on July 5.

Earlier Monday, US Assistant Secretary of State Christopher Hill ruled out a military response over Pyongyang's continued refusal to freeze its nuclear weapons programme and its snubbing of multilateral talks to end the crisis.

But among other measures, Washington will see to it that North Korea cannot forge American currency and get its hands on new missile technology, he said in Manila.

"We're going to do everything we can do to make it difficult for the North Koreans to do that," Hill said.

In regional security talks in Malaysia on Friday, US Secretary of State Condoleezza Rice urged North Korea to rejoin negotiations on its nuclear programme. She said the United States was ready "at any time, at any place and without any conditions" to meet the regime under the six-nation talks framework that began three years ago.

But North Korea, which walked out of the talks in November, says it will not return until separate US financial sanctions are dropped.

Washington accused a Macau-based bank of helping Pyongyang launder earnings from fake US currency, and told US financial institutions to stop dealing with the bank.

The United States has said the clampdown on the bank is a criminal matter and should not be linked to the nuclear issue.

In 2000, the United States had relaxed its economic sanctions after Pyongyang agreed to a moratorium on its missile tests.

But in comments published in Monday's Financial Times newspaper, Levey said restoring those sanctions was "one of the things being considered" since this month's missile test.

The 2000 decision allowed US citizens to travel to the isolated state and to engage in limited trade with North Korean entities. Restrictions on currency remittances were also eased.

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