In depth

 North Korea's nervous neighbours
N Korea's nuclear trump card
 A state of war
 Timeline: N Korea's bomb
 Obama condemns 'reckless' N Korea
 N Korea nuclear test angers China
 Seoul joins US anti-WMD drive
 Markets rattled by N Korea test
 World reaction: N Korea bomb test

Hans Blix on North Korea's nuclear fallout
 Double standards on nuclear weapons
 N Korea test raises regional tensions
 US military in South Korea 'pushing' the North
 South Korea's nuclear fears
 China's troublesome ally
 N Korea test sparks alarm
 UN 'should expel N Korea'
 N Korea's 'nuclear gamble'
 Riz Khan: Diplomatic fallout

But since then, the six-nation denuclearisation talks have failed and, following the North's second nuclear test at the end of May, the prospect for rapprochement vanished.

"Obviously they were taken off of the list for a purpose, and that purpose is being thwarted by their actions," Clinton said.

Coming off the list gave North Korea access to international finance and allowed some trade sanctions to be lifted. Others remained following the North's first nuclear test in 2006.

Clinton said that the US plans to work hard to stop the flow of money into the country.

New sanctions

The UN security council is presently debating a resolution that would broaden sanctions on North Korea.

Clinton suggested the resolution would be backed by China and Russia, which had both used their veto powers to resist previous measures.

The latest tension between the US and North Korea coincides with the trial of two American journalists working for the Current TV network and being held in Pyongyang.

Some analysts say the pair are being used as bargaining chips between the two countries.

But Clinton separated the case of the journalists, which she called a humanitarian issue, with the nuclear issue.

North Korea withdrew from the Nuclear Non-Proliferation Treaty in 2003.