WASHINGTON -- The United States hopes North Korea will choose a path of peace, not confrontation, US Secretary of State Mike Pompeo said Monday, as the regime has threatened to take a "new way" over stalled denuclearization talks with Washington.

Pompeo made the remark in an interview with Fox News amid expectations North Korean leader Kim Jong-un may announce a new US policy in his upcoming New Year's address.

"We're watching very closely ... we maintain our view that we can find a path forward to convince the leadership in North Korea that their best course of action is to create a better opportunity for their people by getting rid of their nuclear weapons," Pompeo said.

"We're watching what they're doing here in the closing days of this year, and we hope that they'll make a decision that will lead to a path of peace and not one towards confrontation," he continued, noting that key meetings of the North Korean ruling party are currently under way in Pyongyang.

The North Korean regime earlier demanded that the US show flexibility in their negotiations before the end of the year, suggesting strongly that it will otherwise revert to testing nuclear weapons and intercontinental ballistic missiles.

Tensions heightened after the North warned of an unwanted "Christmas gift" for the US -- a "gift" that did not materialize.

South Korean and US officials have remained on high alert amid assessments the window for a provocation has not yet closed.

"We're watching it closely. We're monitoring," Pompeo reiterated, noting that key meetings of the North Korean ruling party are currently under way in Pyongyang.

Asked if the US may have to change its strategy, he answered, "We always stare at it. We're always looking and thinking, do we have it right? Do we have the approach right?"

The US will continue on the current path for now, Pompeo said.

"We remain more hopeful than others, but North Koreans get to make a choice. We hope they'll make the right one," he added.

US President Donald Trump and Kim have met three times since June 2018 to try to reach a deal on denuclearizing North Korea in exchange for US sanctions relief and security guarantees.

Since the collapse of their second summit in Vietnam in February, negotiations have been deadlocked over how to match their steps.

In an interview with ABC on Sunday, US National Security Adviser Robert O'Brien warned North Korea that the United States has many "tools in its toolkit" to respond to any major provocation and will use them to demonstrate its disappointment.

Trump, meanwhile, has brushed off the North's warning of a "Christmas gift."

"Maybe it's a nice present," he told reporters at his Mar-a-Lago resort in Florida on Christmas Eve. "Maybe it's a present where he sends me a beautiful vase as opposed to a missile test." (Yonhap)