The US "will not accept" a nuclear-armed North Korea, Defence Secretary Robert Gates has told an Asian summit.
Mr Gates said the US would "not stand idly by as North Korea builds the capability to wreak destruction on any target in the region or on us".
A top Chinese army official attending the meeting called on all parties involved to remain "cool-headed".
Earlier, the US said activity in the North could indicate plans for a new long-range missile test.
Vehicle movements resembled the build-up to a test last month, the US said.
'Potential arms race'
Speaking in Singapore, Mr Gates made it clear the US would take an extremely dim view of more nuclear or missile testing by North Korea.
"The truth of the matter is if they continue on the path they are on, I think the consequences for stability in the region are significant.
"I think it poses the potential for some kind of an arms race here in this region.
"We will not stand idly by as North Korea builds the capability to wreak destruction on any target in the region or on us," Mr Gates added.
However, he said he did not consider North Korea to be a direct military threat to the US "at this point".
He insisted the next step in negating Pyongyang's ambitions would be political, not military.
The Pentagon chief also argued for bolstering diplomatic relations with China, and cited common challenges facing regional Asian powers: counter-terrorism, piracy, energy security and disaster relief.
"It is essential for the United States and China to find opportunities to co-operate wherever possible," he said.
The BBC's Asia correspondent, Jonathan Head, says Mr Gates' speech is probably intended to reassure countries in the region that the new administration in Washington is committed to supporting its allies.
Some of Mr Gates' words were echoed by Ma Xiaotian, deputy chief of general staff of China's People's Liberation Army.
"Our stand on the issue is consistent. We are resolutely opposed to nuclear proliferation.
"Our view is that the Korean peninsula should move towards denuclearisation," Mr Ma told the summit.
"Our hope is that all parties concerned will remain cool-headed and take measures to address the problem."
New test concerns
Before Mr Gates spoke, defence officials in Washington said US satellite photos had revealed vehicle activity at a site in North Korea used to fire long-range missiles.
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27 May - North Korea says it is abandoning the truce that ended the Korean war and reportedly test-fires another missile
26 May - The North test-fires short-range missiles as South Korea announces it will join a US-led initiative to control trafficking in weapons of mass destruction
26 May - President Barack Obama pledges military support for America's East Asian allies, as the UN condemns the nuclear test
25 May - North Korea stages its second nuclear test, triggering international condemnation
29 April - Pyongyang threatens to carry out a nuclear test unless the UN apologises for criticising its recent rocket launch
14 April - Pyongyang says it is ending talks on its nuclear activities and will restore its disabled nuclear reactor after UN criticism of its rocket launch
5 April - The North goes ahead with a controversial rocket launch, seen by major governments as a cover for a long-range missile test
The officials, speaking on condition of anonymity, said the US was closely monitoring the North's missile sites and other sensitive facilities.
However, a Pentagon official told the BBC that the US had noticed this type of activity on previous occasions which did not always lead to a missile being fired.
The official said activity at this site had been going on for more than a couple of days, but did not know for how long exactly.
On Friday, Pyongyang also fired a short-range missile off its east coast, and warned of "self-defence" measures if the UN Security Council imposed sanctions over what it says was a successful nuclear test carried out earlier in the week.
The North has been subject to international criticism, from the US, China and Russia among others, since the explosion, which, if confirmed, would be the North's second atomic test.
The hardline communist state, under President Kim Jong-il, has threatened military action against the South after Seoul's decision to join a US-led Proliferation Security Initiative (PSI), under which North Korean ships could be stopped and searched.
US and South Korean troops are currently on high alert after the North said it was no longer bound by the truce that ended the Korean war in 1953.
Pyongyang says Seoul's decision to join the PSI is tantamount to an act of war.