(Recasts with White House quotes)
* White House says still hopeful it will take place
* North Korea says may have to "reconsider" meeting
* N.Korea derides Bolton's "Libya-style" suggestion
By Steve Holland and Christine Kim
WASHINGTON/SEOUL, May 16 (Reuters) - The United States is still hopeful that an unprecedented summit with North Korea will take place, in spite of a threat by Pyongyang to pull out, but President Donald Trump is prepared for a tough negotiation, the White House said on Wednesday.
North Korea threw the June 12 summit into doubt on Wednesday saying it might not attend if Washington continues to insist that it unilaterally give up its nuclear weapons. North Korea also called off high-level talks with South Korea scheduled for Wednesday, blaming U.S.-South Korean military exercises.
"We're still hopeful that the meeting will take place and we'll continue down that path but at the same time we've been prepared that these could be tough negotiations," White House spokeswoman Sanders said.
"The president is ready if the meeting takes place," she told Fox News. "If it doesn't, we'll continue the maximum pressure campaign that's been ongoing."
Sanders said the North Korean comments were "not something that is out of the ordinary in these types of operations."
North Korea on Wednesday cast doubt on whether the planned meeting between leader Kim Jong Un and Trump, which is set for Singapore, would be held.
"If the U.S. is trying to drive us into a corner to force our unilateral nuclear abandonment, we will no longer be interested in such dialogue and cannot but reconsider our proceeding to the...summit," said Kim Kye Gwan, North Korea's first vice minister of foreign affairs.
He specifically criticized U.S. National Security Adviser John Bolton, who has called for North Korea to quickly give up its nuclear arsenal in a deal that would mirror Libya's abandonment of its program for weapons of mass destruction.
North Korea clashed with Bolton when he worked under the Bush administration, calling him "human scum" and a "bloodsucker".
"We shed light on the quality of Bolton already in the past, and we do not hide our feeling of repugnance towards him," Kim the vice minister said.
Sanders appeared reluctant to endorse the Libya model that the outspoken and hawkish Bolton has touted, most recently on U.S. television on Sunday, saying: "I haven't seen that as part of any discussions, so I'm not aware that that's a model that we're using."
Sanders said the model that would be followed in dealing with North Korea was "the President Trump model."
"He's going to run this the way he sees fit. We're 100 percent confident...he's the best negotiator."
Trump himself has yet to respond to the North Korean statements, which a U.S. official said had taken the White House off guard after North Korean leader Kim's diplomatic outreach both to the United States and South Korea.
Cancellation of the summit, the first meeting between a serving U.S. president and a North Korean leader, would deal a major blow to what would be the biggest diplomatic achievement of Trump's presidency.
Trump has raised expectations for success even as many analysts have been sceptical about the chances of bridging the gap due to questions about North Korea's willingness to give up a nuclear arsenal that it says can hit the United States.
North Korean official Kim Kye Gwan derided as "absurd" Bolton's suggestion that discussions with North Korea should be similar to those that led to components of Libya's nuclear program being shipped to the United States in 2004.
"(The) world knows too well that our country is neither Libya nor Iraq which have met miserable fate," Kim said in an apparent reference to the demises of Libyan leader Muammar Gaddafi and Iraqi former president Saddam Hussein.
He said North Korea was a nuclear weapon state while Libya had been at the initial stage of nuclear development.
The North Korean statements marked a dramatic reversal in tone from recent months when Pyongyang appeared to embrace efforts to negotiate.
North Korea had announced it would publicly shut its nuclear test site next week. On Sunday, U.S. Secretary of State Mike Pompeo said Washington would agree to lift sanctions on North Korea if it agreed to completely dismantle its nuclear weapons programme. Pompeo also held out the prospect of U.S. private sector investment.
Kim Kye Gwan's statement appeared to reject that, saying North Korea would never give up its nuclear program in exchange for trade with the United States.
"We have already stated our intention for denuclearization of the Korean peninsula and made clear on several occasions that precondition for denuclearization is to put an end to anti-DPRK hostile policy and nuclear threats and blackmail of the United States," Kim said.
North Korea defends its nuclear and missile programmes as a necessary deterrent against perceived aggression by the United States, which keeps 28,500 troops in South Korea, a legacy of the 1950-53 Korean War.
It has long said it is open to eventually giving up its nuclear arsenal if the United States withdraws its troops from South Korea and ends its "nuclear umbrella" security alliance with Seoul.
The Trump administration has insisted on complete, verifiable, and irreversible dismantling of North Korea's nuclear weapons and the facilities needed to build the weapons as soon as possible.
North Korea announced it was pulling out of the talks with the South after denouncing U.S.-South Korean "Max Thunder" air combat drills, which it said involved U.S. stealth fighters, B-52 bombers and "nuclear assets".
American stealth F-22 fighters were spotted in South Korea in May, but the U.S. military command in South Korea said no B-52s were scheduled to take part.
A South Korean defence ministry official said the drills would go on as planned.
Some analysts and U.S. officials believe North Korea may be testing Trump's willingness to soften the U.S. demand for complete denuclearization.
Dutch U.N. Ambassador Karel van Oosterom, who chairs the U.N. Security Council North Korea sanctions committee, said he remained hopeful.
"Anyone who has had anything to do with DPRK in the past 20, 30, 40 years has seen that engaging in the political contact with DPRK is complex," he said. "The road ahead will have bumps, and I think we are hitting one of the bumps at the moment."
The doubt thrown over the summit comes a week after Trump abandoned the 2015 nuclear deal between Iran and six world powers, under which Tehran curbed its nuclear program in exchange for the lifting of most international sanctions. (Reporting by Josh Smith and Christine Kim in Seoul, Tim Kelly in Tokyo, Philip Wen and Christian Shepherd in Beijing, David Brunnstrom, Phillip Stewart, Tim Ahmann, Matt Spetalnick, Lesley Wroughton and Doina Chiacu in Washington and Michelle Nichols at the United Nations Editing by Robert Birsel and Alistair Bell)
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