North Korea proposed Monday signing a peace treaty this year to formally end the Korean War, a suggestion Washington quickly dismissed.

In a move seen as an attempt to bolster its negotiating position, the isolated communist regime said a return to negotiations on its nuclear weapons program depends on better relations with Washington and the lifting of sanctions.

However, U.S. State Department spokesperson P.J. Crowley told reporters Monday that peace treaty talks would only be discussed once North Korea comes back to six-nation nuclear talks and takes steps on abandoning its nuclear programs.

As for dropping sanctions, Crowley said, "We're not going to pay North Korea to come back to the six-party process."

He urged North Korea to "say yes" to returning to the talks "and then we can begin to march down the list of issues that we have."

North Korea has long demanded a peace treaty, but the prospect seemed dim. South Korea is suspicious that its rival is using the issue as a distraction and a U.S. official said Monday that the authoritarian North must improve its human rights record before any normalization of ties.

It's believed the country holds 150,000 people at camps for political prisoners.

Washington and Pyongyang have never had diplomatic relations because the 1950-53 Korean War ended in a truce, not a peace treaty, thus leaving the peninsula technically at war.

North Korea, which claims it was forced to develop atomic bombs to cope with U.S. threats, quit six-nation nuclear talks last year in anger over international condemnation of a long-range rocket launch.

The country later conducted its second nuclear test, launched a series of ballistic missiles and restarted its plutonium-producing facility, inviting widespread condemnation and tighter UN sanctions.

After months of tension, the North said last month it understood the need to resume talks with the U.S., South Korea, China, Russia and Japan

Still, the country did not make a firm commitment on when it would rejoin the forum.

Peace proposal offers pros and cons: expert

Analysts said the North's proposal likely means it wants to elevate the signing of a peace treaty as a key issue in the nuclear disarmament talks.

"We can see its concealed intention to soften discussion of its denuclearization," said Yang Moo-jin of Seoul's University of North Korean Studies.

The North Korean government said in a statement that the peace talks could be held within the framework of the six-party talks or at a separate forum as agreed in a 2005 disarmament pact.

Peter Beck, an expert on North Korea conducting research at California's Stanford University, said the North's proposal carries both pitfalls and opportunities for the U.S.

"The concern is that this will give the North Koreans a sense that the focus is no longer on denuclearization, it's on a peace treaty and sort of accepting the North Koreans as a nuclear state," Beck said. "So that's certainly why the administration's been very cautious."

Beck added that in reality North Korea is a nuclear state and Obama needs to offer "concrete steps" to get the denuclearization process going, with accepting the North's call for a peace treaty a possible way forward.

"It costs Washington nothing and could test the North Koreans as to their seriousness about real negotiations," he said.