BEIJING (Reuters):

China declined yesterday to rule out possible United Nations sanctions against North Korea for carrying out a reported nuclear test but said any military action was unimaginable.

It said it had no information about widespread speculation that secretive North Korea might be ready to conduct a second test.

Asked what Beijing thought of the possibility of military action, Foreign Ministry spokesman Liu Jianchao told a news conference: "I think this is an unimaginable way."

Painful crackdown

But a mainland-controlled Hong Kong newspaper, Wen Wei Po, reported that China had cancelled leave for troops along at least part of its border with North Korea and that some were conducting 'anti-chemical' training exercises.

Analysts say the Stalinist North's announcement on Monday it had conducted an underground nuclear test was almost certainly a bid to push the United States into ending a painful crackdown on its finances and finally agree to one-on-one negotiations.

South Korea's Yonhap news agency quoted a North Korean official saying his country would only return to six-country talks to end its nuclear development if Washington made concessions.

"We are still willing to abandon nuclear programmes and return to six-party talks ... if the United States takes corresponding measures," it quoted the unidentified official as saying from Beijing.

But he added that Pyongyang was prepared to put nuclear warheads on missiles and conduct additional nuclear tests "depending on how the situation develops".

Far from making concessions, the United States and Japan - a traditional target for North Korean hostility - pushed at the United Nations on Monday for harsh sanctions.

'Sunshine policy'

Even South Korean President Roh Moo-hyun vowed to review his 'sunshine policy' of engagement with the reclusive state after commentators slammed him for being too soft. One declared the country was now in its worst crisis since the Korean War more than half a century ago.