North Korea has offered to stop its increasingly ambitious nuclear weapons tests if the US ceases its annual military exercises with South Korea.
Speaking in a rare Western media interview at the UN in New York, the North Korean foreign minister defended his country's right to maintain a nuclear deterrent.
Ri Su Yong told the Associated Press the US was "totally mistaken" if it thought economic sanctions were enough to stop North Korea's nuclear programme.
"We made what we consider a very logical proposal to the US government," he said. "Stop your nuclear war exercises in the Korean peninsula, then we'll cease nuclear tests."
Asked about the comments at a news conference on his arrival in Germany, Barack Obama said the US was not taking them seriously.
The president told reporters that a commitment to reducing tensions was not shown "based on a press release", and that North Korea would have to do better.
Mr Ri's comments came on Saturday as the North Korean government announced it had successfully launched a ballistic missile from a submarine, a development which could render the country capable of launching a nuclear weapon without warning.
South Korean media quoted military officials reporting the launch some hours earlier, saying the missile travelled some 30km before falling into the sea off North Korea's eastern coast.
Mr Ri called on the US to to suspend its military exercises first in order to open the door to talks and end the escalation of tensions.
"If we continue on this path of confrontation, this will lead to very catastrophic results, not only for the two countries but for the whole entire world as well," he said.
"It is really crucial for the US government to withdraw its hostile policy against the DPRK and as an expression of this stop the military exercises, war exercises, in the Korean Peninsula. Then we will respond likewise."
The US responded to the submarine missile launch by saying it would limit Mr Ri's movements during his visit, adding that "launches using ballistic missile technology are a clear violation of multiple UN Security Council resolutions".
"We call on North Korea to refrain from actions that further destabilise the region and focus instead on taking concrete steps toward fulfilling its commitments and international obligations," a spokesman for the State Department said.
During the wide-reaching interview with AP, the North Korean minister was asked about the case of an American student sentenced to 15 years' hard labour for trying to steal a propaganda poster during a tourist trip to Pyongyang.
Mr Ri defended the sentence and said the case of 21-year-old Otto Warmbier was being used by Washington "as a tactic to make our lives difficult". He said he would nonetheless relay back to North Korea the US concerns over the student's treatment.
And the minister rejected suggestions that North Korea was a hermit kingdom, closed off to external scrutiny.
"We have our doors open for anybody who is interested to come to the DPRK and see the reality," he said, thought he added there would be risks for visitors who "totally fabricate" the situation in the country.
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