North Korea said Saturday it was willing in principle to return to nuclear disarmament talks after the United Nations failed directly to blame it for a deadly attack on a South Korean warship.
The North, which denies US and South Korean claims that it torpedoed the ship with the loss of 46 lives, indicated it felt vindicated by the UN statement which was watered down under pressure from China, Pyongyang's ally.
All parties in the months-long dispute, which has sharply raised regional tensions, professed satisfaction with the presidential statement adopted Friday, which condemns the March attack without specifying the culprit.
The North said the statement exposes the "foolish calculation" of the United States and South Korea in bringing the issue to the UN. It warned of "strong physical retaliation" if they press on with countermeasures over the sinking.
If hostile forces persist in "demonstration of forces and sanctions", they would not escape "strong physical retaliation" or evade responsibility for escalating the conflict, a foreign ministry spokesman told official media.
The South Korean and US navies are planning a joint exercise to deter North Korean "provocation". Seoul has announced reprisals including a partial trade cut-off.
Repeating its earlier stance, the North said it would make "consistent efforts for the conclusion of a peace treaty and the denuclearisation through the six-party talks conducted on equal footing".
The talks have been stalled since North Korea quit them in April 2009.
The North has previously expressed willingness in principle to return. But first it wants the US to agree to hold talks on a peace treaty formally ending the 1950-53 war and an end to sanctions.
Professor Kim Yong-Hyun of Seoul's Dongguk University said Pyongyang believed it had put up a good defence at the United Nations since the statement stopped short of blaming the North.
"North Korea is now taking a peace offensive, calling for dialogue," he said.
South Korea, its ally the United States and several other countries had urged the UN to censure the North for the sinking, but China resisted such a move.
The statement condemns the attack as a threat to regional peace and calls for "appropriate and peaceful measures" against those responsible.
It expresses deep concern at the findings of a multinational investigation team which concluded the North was to blame, but "takes note" of the North's denial of responsibility.
The statement welcomes Seoul's restraint and calls for direct talks to settle disputes on the peninsula peacefully.
The North's ambassador to the UN, Sin Son-ho, hailed the statement as "our great diplomatic victory". The foreign ministry spokesman was less triumphal but noted the call for dialogue.
The spokesman complained that the UN "hastily tabled and handled the case before the truth of the case has been probed" and described the allegations against Pyongyang as a "conspiratorial farce".
South Korea welcomed the UN's stance, saying it "emphasised the importance of preventing further provocations". But it called on the North to accept responsibility for the attack and apologise, in addition to showing a commitment to denuclearisation.
"North Korea, above all, must clearly show its will toward denuclearisation," said foreign ministry spokesman Kim Young-Sun.
The South's defence ministry meanwhile said there was no change to its plan to carry out a joint naval exercise with the United States in the Yellow Sea, despite objections from China.
US Secretary of State Hillary Clinton, who will visit South Korea this month, said the UN had sent a warning to North Korea "that such irresponsible and provocative behaviour is a threat to peace and security in the region and will not be tolerated".
Japan described the UN text as "a clear message of the international community about a North Korean attack" while China merely said it was time to move on.
"We hope the involved parties continue to maintain calm and restraint, and take this opportunity to flip over the page of the Cheonan incident as soon as possible," a foreign ministry spokesman said in Beijing.