U.S. says 'major conflict' with North Korea possible, China warns of danger of escalation

(REUTERS) U.S. President Donald Trump said a "major, major conflict" with North Korea was possible over its nuclear and ballistic missile programs, while China said the situation on the Korean peninsula could escalate or slip out of control.

Trump, speaking to Reuters on Thursday, said he wanted to resolve the crisis peacefully, possibly through the use of new economic sanctions, although a military option was not off the table.

"There is a chance that we could end up having a major, major conflict with North Korea," Trump said in an interview at the Oval Office.

"We'd love to solve things diplomatically but it's very difficult," he said, describing North Korea as his biggest global challenge.

Chinese Foreign Minister Wang Yi said there was a danger that the situation on the Korean peninsula could escalate or slip out of control, his ministry said.

Wang made the comments in a meeting with a Russian diplomat on Thursday at the United Nations, the ministry said in a statement.

China, the only major ally of North Korea, has been increasingly uncomfortable in recent months about its neighbor's pursuit of nuclear weapons and long-range ballistic missiles in violation on U.N. resolutions.

The United States has called on China to do more to rein in Pyongyang and Trump lavished praise on Chinese President Xi Jinping for his efforts, calling him "a good man".

"I believe he is trying very hard. I know he would like to be able to do something. Perhaps it's possible that he can't. But I think he'd like to be able to do something," Trump said.

U.S. Secretary of State Rex Tillerson said on Thursday that China had asked North Korea not to conduct any more nuclear tests. Beijing had warned Pyongyang it would impose unilateral sanctions if it went ahead, he added.

"We were told by the Chinese that they informed the regime that if they did conduct further nuclear tests, China would be taking sanctions actions on their own," Tillerson said on Fox News, without specifying what sanctions he was referring to.

Tillerson did not say when China made the threat and there was no immediate confirmation from Beijing. He is due to chair a meeting with U.N Security Council foreign ministers on Friday, where he said he would stress the need for members to fully implement existing sanctions as well as possible next steps.

China banned imports of North Korean coal in February, cutting off its most important export, and Chinese media this month raised the possibility of restricting oil shipments to the North if it unleashed more provocations.

MISSILE DEFENSE, CARRIER GROUP

In a show of force, the United States is sending the USS Carl Vinson aircraft carrier group to waters off the Korean peninsula, where it will join the USS Michigan, a nuclear submarine that docked in South Korea on Tuesday. South Korea's navy has said it will hold drills with the U.S. strike group.

Admiral Harry Harris, the top U.S. commander in the Pacific, said on Wednesday the carrier was in the Philippine Sea, within two hours' striking distance of North Korea if needs be.

Harris also said a U.S. missile defense system being deployed in South Korea to ward off any North Korean attack would be operational in coming days.

China has been angered by the deployment of the Terminal High Altitude Area Defense (THAAD), complaining that its radar can see deep into China and undermines its security.

Trump said in the interview he wants South Korea to pay the cost of the THAAD, which he estimated at $1 billion. South Korea, one of Washington's most crucial allies in the region, said the United States would have to bear the cost, pointing to possible friction ahead.

Trump has vowed to prevent North Korea from being able to hit the United States with a nuclear missile, a capability experts say Pyongyang could have some time after 2020.

North Korea has conducted five nuclear tests and numerous missile tests, including one this month, a day before a summit between Trump and Xi in Florida.