Japan's PM Junichiro Koizumi has called for calm after North Korea said it was suspending its participation in talks on its nuclear programme.
Mr Koizumi said Japan should not rush to impose sanctions on the North, as some Japanese politicians demanded.
Other nations have expressed their dismay at Pyongyang's statement, and urged for negotiations to continue.
"We want North Korea's unconditional participation," South Korea's government said in a statement.
The North Korean Foreign Ministry's statement on Thursday said further six-nation talks on the nuclear issue had been rendered pointless by "hostile" US policy.
"The second-term Bush administration's intention to antagonise the DPRK and isolate and stifle it at any cost has become quite clear," the ministry said.
But a senior North Korean diplomat, Han Song-Ryol, said on Friday that Pyongyang might change its attitude if Washington offered to hold direct dialogue with North Korea.
However the US rejected the idea of direct talks, as it has done many times in the past.
White House spokesman Scott McClellan said: "There [are] plenty of opportunities for North Korea to speak directly with us in the context of the six-party talks."
Ongoing abduction row
North Korea's statement - which included its first explicit, public assertion that it has nuclear weapons - had strong words to say about Japan, which it described as "persistently pursuing its hostile policy toward the DPRK, toeing the US line".
" There is no justification for us to participate in the six-party talks again, given that the Bush administration termed [us] an 'outpost of tyranny' "
It accused Tokyo of trying to prevent normalised relations by making false claims over the "abduction issue" - an ongoing row over missing Japanese nationals which North Korea admits to having kidnapped in the 1970s and 80s.
Pyongyang claims the abduction issue has now been "settled", but Japan insists recent remains sent back to Tokyo did not belong to the people North Korea claims they did.
Tokyo has even threatened Pyongyang with sanctions over the issue.
With relations between Japan and North Korea already troubled, even before Thursday's announcement, Mr Koizumi was guarded in his comments on Friday.
"I understand calls for imposing sanctions are growing," Mr Koizumi told Jiji Press news agency, "but we have to urge [North Korea] to come to the talks".
"We have to co-operate with other countries while fully considering what effect sanctions would have," he said.
'Exaggeration'
Other Asian nations also played down the impact of Pyongyang's statement, and urged it to attend a further round of six-nation talks - with the US, Japan, South Korea, China and Russia.
South Korean Foreign Minister Ban Ki-moon, arriving in Washington to meet Secretary of State Condoleezza Rice on Monday, said the North had left a door open for returning to the talks by saying it remained committed to resolving the nuclear standoff through dialogue.
US-N KOREA RHETORIC
Vice Foreign Minister Lee Tae-shik told Yonhap news agency that Pyongyang's statement appeared primarily aimed at improving its negotiating power.
"But it could turn into a very serious problem if the North takes additional steps," he conceded.
In Australia, Prime Minister John Howard said Pyongyang's statement could partly have been an exaggeration.
"There's an element of bluff. I'm sure there's an element of exaggeration even if [North Korea] does have some nuclear capacity," he told Nine Television Network.
"But nobody should imagine that this is anything other than a real problem, and one that has to be handled with a great deal of skill and balance," he added.
US Secretary of State Condoleezza Rice said on Thursday that Pyongyang risked deepening its isolation if it pulled out of talks.
Deputy state department spokesman Adam Ereli said the White House remained committed to talks, but ruled out offering North Korea new incentives to return to the negotiations.
"Our position is consistent, and we don't see a need to review it," he said.
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