(Updates with Kerry saying what he and Wang discussed)
* Secretary of state appeals to China after nuclear test
* U.S. House may vote soon on sanctions against Pyongyang
By Lesley Wroughton and Ju-min Park
WASHINGTON/SEOUL, Jan 7 (Reuters) - The United States called on China on Thursday to end "business as usual" with its ally North Korea after Pyongyang defied world powers by announcing it had tested a hydrogen bomb.
U.S. Secretary of State John Kerry said he made clear in a phone call with Chinese Foreign Minister Wang Yi that China's approach to North Korea has not succeeded.
"China had a particular approach that it wanted to make, that we agreed and respected to give them space to implement that," Kerry told reporters. "Today in my conversation with the Chinese I made it very clear that has not worked and we cannot continue business as usual."
China is the North's main economic and diplomatic backer although relations between the two Cold War allies have cooled in recent years.
The vast majority of North Korea's business dealings are with China, which bought 90 percent of the isolated country's exports in 2013, according to data compiled by South Korea's International Trade Association.
North Korea carried out a nuclear test on Wednesday, although the U.S. government and weapons experts doubt Pyongyang's assertion that the device it exploded was a powerful hydrogen bomb.
The test angered both the United States and China, which was not given prior notice.
The top U.S. diplomat, Kerry said he and Wang agreed to work closely to determine what measures could be taken given increasing concerns about the nuclear test. Kerry said America has a "firm and continued commitment to regional security and global nonproliferation."
As of Thursday morning, "sniffer" planes and other sensors had yet to detect any evidence, such as particles in the air, that would substantiate the North Korean assertion that it had set off an H-Bomb, a U.S. government source said.
North Korea also said it was capable of miniaturising the hydrogen bomb, in theory allowing it to be placed on a missile and threatening the U.S. West Coast, South Korea and Japan.
U.S. CONGRESS TO ACT
U.S. Republicans and Democrats in the House of Representatives could join forces in a rare display of unity to further tighten sanctions on North Korea.
Nancy Pelosi, the House Democratic leader, told reporters that Democrats would support a North Korea bill likely to be brought for a vote by Republicans next week. A congressional source said it was expected as soon as Monday.
The legislation was passed by the House Foreign Affairs Committee last February but it was stalled until Pyongyang jolted the world by setting off an underground nuclear bomb test.
The House measure would target banks facilitating North Korea's nuclear program and authorize freezing of U.S. assets of those directly linked to illicit North Korean activities. It would also penalize those involved in business providing North Korea with hard currency.
"We understand Republican leadership plans to move a bill strengthening U.S. sanctions on North Korea. That will have strong bipartisan support," Pelosi said, adding that "we will support it."
It was unclear how more sanctions would deter North Korea, which has conducted four nuclear tests since 2006 while paying little heed to international pressure.
The United States and its ally South Korea are limited in their military response. After North Korea last tested a nuclear device, in 2013, Washington sent a pair of nuclear-capable B-2 stealth bombers on a sortie over South Korea in a show of force. At the time, North Korea responded by threatening a nuclear strike on the United States.
The test also alarmed Japan. Its prime minister, Shinzo Abe, agreed with U.S. President Barack Obama in a telephone call that a firm global response was needed, the White House said.
Obama also discussed options with President Park Geun-hye of South Korea.
A South Korean military official told Reuters that Seoul and Washington had discussed the deployment of U.S. strategic assets on the divided Korean peninsula, but declined to give further details.
A White House spokesman said there had been no talk with South Korea about any introduction of the so-called Terminal High Altitude Area Defense (THAAD) system, a move opposed by China.
"There have been no discussions or consultations with the South Koreans" about the deployment of anti-ballistic missile capability," the spokesman, Josh Earnest, said.
The system has radars that can track multiple ballistic missiles up to 2,000 km (1,200 miles) away, a range which would reach deep into China.
In response to the latest test, South Korea said it would resume propaganda broadcasts by loudspeaker into North Korea from Friday, which is likely to infuriate its isolated rival.
The South raised its military alert to the highest level in areas along the border near its propaganda loudspeakers, the South's Yonhap news agency reported on Thursday.
"Our military is at a state of full readiness, and if North Korea wages provocation, there will be firm punishment," a South Korean national security official, Cho Tae-yong, said in a statement.
(Additional reporting by Meeyoung Cho, James Pearson, Se Young Lee, Christine Kim, Jee Heun Kahng and Jack Kim in SEOUL, Patricia Zengerle, Roberta Rampton, Doina Chiacu and Arshad Mohammed in WASHINGTON,; Writing by Alistair Bell; Editing by Howard Goller)