US President Donald Trump says he walked away from a nuclear deal at a summit with North Korean leader Kim Jong-un because of unacceptable North Korean demands to lift punishing US-led sanctions.
Trump said two days of talks in the Vietnamese capital Hanoi had made good progress in building relations and on the key issue of denuclearisation, but it was important not to rush into a bad deal.
"It was all about the sanctions," Trump said at a news conference after the talks were cut short.
"Basically they wanted the sanctions lifted in their entirety, and we couldn't do that."
The United Nations and the United States ratcheted up sanctions on North Korea when the reclusive state undertook a series of nuclear and ballistic missile tests in 2017, cutting off its main sources of hard cash.
Both Trump and Kim left the venue of their talks, the French-colonial-era Metropole hotel, without attending a planned lunch together, and returned to their hotels.
"Sometimes you have to walk, and this was just one of those times," Trump said, adding "it was a friendly walk".
Failure to reach an agreement marks a setback for Trump, a self-styled dealmaker under pressure at home over his ties to Russia and testimony from Michael Cohen, his former personal lawyer who accused him of breaking the law while in office.
The collapse of the talks will likely raise questions about the Trump administration's preparations and about what some critics see as his cavalier style of personal diplomacy.
News of the summit failure sent South Korea's currency lower and knocked regional stock markets. South Korea's Kospi index closed 1.8 per cent lower, marking the biggest one-day percentage loss since October 2018.
North Korea's old rival South Korea, which backs efforts to end confrontation on the peninsula, said it regretted that no deal had been reached but the two sides had made progress.
There was no indication of when Trump and Kim might meet again but the White House said the "respective teams look forward to meeting in the future".
Trump said he and Kim had discussed dismantling North Korea's main nuclear facility at Yongbyon, which Kim was willing to do, but he had wanted sanctions relief.
Trump said he and Kim had discussed dismantling North Korea's main nuclear facility at Yongbyon, which Kim was willing to do, but Kim had wanted sanctions relief first.
There were other facilities that Trump said he had raised, and the North Koreans had been surprised the Americans knew about them, but they had not been able to agree on them.
"We asked him to do more and he was unprepared to do that, but I'm still optimistic," U.S. Secretary of State Mike Pompeo told the news conference, referring to Kim.
Trump said the United States would be able to inspect some North Korean facilities but he did not go into specifics.
Earlier Kim and Trump, seated across from each other at a conference table, appeared confident of progress, and Kim had suggested he was ready to give up his nuclear bombs.
"If I'm not willing to do that, I won't be here right now," Kim told reporters through an interpreter, when asked if he was ready to give up his nuclear weapons.
