* North Korea says talks require end to UN sanctions
* U.S. wants commitment by North to give up nuclear ambitions
* Kerry says offer is unacceptable but a beginning gambit
North Korea offered the United States and South Korea a list of conditions on Thursday for talks, including the lifting of U.N. sanctions, but Washington said it was awaiting "clear signals" that Pyongyang would halt its nuclear weapons activities.
In a sign of a possible end to weeks of heightened hostility on the Korean peninsula, the North's top military body said the denuclearization of the Korean peninsula would begin when the United States removed nuclear weapons that the isolated state said Washington has deployed in the region.
The move was likely a conciliatory gesture to China, North Korea's only major supporter, which has signalled its unease over Pyongyang's escalating threats and said talks were the only way to end the tensions.
"Dialogue and war cannot co-exist," the North's National Defence Commission said in a statement carried by the official KCNA news agency.
"If the United States and the puppet South have the slightest desire to avoid the sledge-hammer blow of our army and the people ... and truly wish dialogue and negotiations, they must make the resolute decision," it said.
The United States has offered talks, but only on the pre-condition that they lead to North Korea abandoning its nuclear weapons ambitions.
Although North Korea signed a denuclearization-for-aid deal in 2005, it later backed out of that pact and now deems its nuclear arms a "treasured sword" that it will never give up.
White House spokesman Josh Earnest told reporters North Korea would first need to show it is serious about abandoning its nuclear ambitions for talks to be meaningful.
"We're open to credible, authentic negotiations, but that's going to require clear signals from the North Korean regime, signals we haven't seen so far," he told reporters aboard Air Force One.
"The belligerent actions and words that we've seen emanating from the North Korean regime actually indicate the opposite."
U.S. Secretary of State John Kerry, who this week ended a trip to the region that was dominated by concern about North Korea, has stressed his interest in a diplomatic solution.
He told a U.S. Senate hearing that Pyongyang's offer was "at least a beginning gambit," but added that it was "not acceptable, obviously, and we have to go further."
"One thing we're not going to get into is .. 'Here's a little food aid, here's a little this, then we'll talk.'" Kerry told the Senate Foreign Relations Committee in a rejection of previous patterns of negotiations with North Korea.
South Korea which has angered North Korea by conducting annual military exercises with U.S. forces, has also proposed talks. Pyongyang rejected the offer as insincere.
North Korea stepped up its defiance of U.N. Security Council resolutions in December when it launched a rocket that it said had put a scientific satellite in orbit. Critics said the launch was aimed at developing the kind of technology needed to deliver a nuclear warhead mounted on a long-range missile.
That was followed in February by the North's third test of a nuclear weapon. That test triggered new U.N. sanctions in March, toughening existing measures, which in turn led to a dramatic intensification of Pyongyang's threats of nuclear strikes against South Korea and the United States.
The North's military commission said U.N. Security Council sanctions, "fabricated with unjust reasons" must be withdrawn.
"They should bear in mind that doing so would be a token of good will towards the DPRK," it said. The North's official name is the Democratic People's Republic of Korea.
"The denuclearization of the Korean peninsula can begin with the removal of the nuclear war tools dragged in by the U.S. and it can lead to global nuclear disarmament," it added.
South Korea saw the demands as "regretful" and "cliched" and called on North Korea to withdraw them, a government official told reporters, according to the South's Yonhap news agency.
The North's military commission also called for an end to military exercises such as the annual U.S.-South Korean drills that began in early March and are due to run until the end of April.
"Frequent nuclear war manoeuvres will only strain the situation and totally block the way of dialogue."
North Korea has a long record of making threats to secure concessions from the United States and South Korea, only to repeat the process later. Both the United States and the South said this week that the cycle must cease.
Kerry has stressed China's importance in influencing North Korea and made that point in talks in Beijing last week.
"China sees a growing level of instability in the region, and the last thing they would want, I'm convinced, is a war on their doorstep or a completely destabilized Korean peninsula," he said on Thursday. "China has huge ability here to have a major impact."
China, which sided with North Korea in the 1950-53 civil war against the U.S.-backed South, has always been reluctant to apply pressure on Pyongyang, fearing instability if the North were to implode and send floods of refugees into China. It has also looked askance at U.S. military drills in South Korea.
China's Foreign Ministry spokeswoman Hua Chunying said it was in everyone's interests to see the denuclearization of the whole Korean peninsula.
"We believe that dialogue and consultation is the only correct way to resolve matters," she said. "The most pressing task is to step up diplomatic efforts and return as soon as possible to the correct path of dialogue and consultation."