(LEAD) Haley: U.S. prepared to use military force against N. Korea if necessary

(ATTN: UPDATES with more quotes, details, background)

NEW YORK, July 5 (Yonhap) -- The United States will use military force against North Korea if necessary, the U.S. ambassador to the United Nations said Wednesday, warning the regime's actions, including its test-firing of an intercontinental ballistic missile, are "quickly closing off" chances of a diplomatic solution.

"Make no mistake. North Korea's launch of an ICBM is clear and sharp military escalation. The North Korean regime openly states that its missiles are intended to deliver nuclear weapons to strike cities in the United States, South Korea and Japan, and now has greater capacity to do so," Amb. Nikki Haley said during a U.N. Security Council meeting.

"Their actions are quickly closing off the possibility of a diplomatic solution. The United States is prepared to use the full range of our capabilities to defend ourselves and our allies. One of our capabilities lies with our considerable military forces. We will use them if we must. But we prefer not to have to go in that direction," she said.

Haley also warned that countries should choose whether to do business with the North or the U.S.

"There are countries that are allowing, even encouraging trade with North Korea in violation of U.N. Security Council resolutions. Such countries would also like to continue their trade arrangements with the United States. That's not going to happen," she said.

Haley also said the U.S. will propose a new Security Council sanctions resolution against the North.

"If we're unified, the international community can cut off major sources of hard currency to the North Korean regime," she said. "We can restrict the flow of oil to their military and their weapons program. We can increase air and maritime restrictions. We can hold senior regime officials accountable."

Haley acknowledged that there have been numerous U.N. sanctions against the North, but they have been insufficient to get the North to change its course. So in order to have an impact, in order to move North Korea off its military escalation, Haley said that the world must do more.

"We will not look exclusively at North Korea. We will look at any country that chooses to do business with this outlaw regime. We will not have patience for stalling or talking our way down to a watered down resolution," she said.

"Time is short. Action is required. The world is on notice. If we act together, we can still prevent a catastrophe and we can rid the world of a grave threat. If we fail to act in a serious way, there will be a different response," she added.

Haley also took a swipe at China, saying Beijing has much of the burden of enforcing U.N. sanctions.

"Ninety percent of trade with North Korea is from China. We will work with China. We will work with any and every country that believes in peace. But we will not repeat the inadquate approaches of the past that have brought us to this dark day," she said.