North Korea is moving ahead with plans to enrich uranium in a possible move to develop a nuclear weapon, South Korea's defence minister said Tuesday.

"It is clear that they are moving forward with it," Reuters reported Lee Sang-hee telling a parliamentary hearing.

Lee said a uranium enrichment program would be easier to hide than a program to reprocess plutonium from spent fuel rods, as the North is believed to do at the Yongbyon reactor. Plutonium can be used in nuclear bombs.

Washington, which monitors the Yongbyon reactor by satellite, believes North Korea has enough reprocessed plutonium to make six to eight nuclear weapons.

Earlier this month, North Korea's foreign ministry said it would be "absolutely impossible" to give up its nuclear weapons and said it would begin to enrich uranium for a light-water nuclear reactor.

Pyongyang has issued a series of increasingly belligerent threats against the West since the United Nations Security Council levelled new sanctions against the North following its nuclear test last month.

North Korean ship turns around

On Tuesday, U.S. officials said a North Korean ship they had been tracking off the coast of Vietnam turned around and headed back the way it came.

The report said it was unclear whether the ship, suspected of carrying illicit weapons, was returning to its home port in North Korea or diverting elsewhere.

The ship, the Kang Nam, left a North Korean port on June 17 and is the first vessel monitored under UN sanctions that ban the regime from selling arms and nuclear-related material.

Officials suspected the ship was headed to Burma, also known as Myanmar. That country's ruling military junta denies any connection with the vessel.

Pyongyang has threatened to launch a military strike against South Korea if it took part in the U.S.-led program to intercept North Korean ships suspected of carrying weapons.

U.S. freezes ties with companies

Also Tuesday, Washington targeted at least two companies over alleged links to the North's nuclear program, freezing any U.S. assets held by the companies and banning them from dealing with any American firms or Americans.

The U.S. State Department said North Korea's Namchongang Trading Corp. is "nuclear-related" company and was involved in the purchase of aluminum tubes and other equipment "specifically suitable for a uranium enrichment program since the late 1990s," said Reuters.

Sanctions were also imposed on an Iranian-based firm, Hong Kong Electronics. Washington believes it transferred millions of dollars of nuclear proliferation-related funds to North Korea from Iran.

With files from The Associated Press