North Korea has proposed direct military talks with Seoul and urged the UN Security Council to back Pyongyang's quest to conduct its own probe into the March sinking of a South Korean warship.

In a letter dated Tuesday to the Security Council's Mexican presidency and obtained by AFP, the North repeated its rejection of the conclusions of a multinational investigation into the incident, which found North Korean torpedoes were at fault.

Pyongyang, which has repeatedly denied the charges, also requested authorization to inspect the site of the March 26 sinking of the Cheonan corvette that killed 46 South Korean sailors close to the disputed border.

"We are of the view that the most reasonable way of settling this incident is that the north and south of Korea sit together to probe for the truth," North Korea's UN Ambassador Sin Son-ho said in a letter to Mexican Ambassador to the UN Claude Heller, who presided over the 15-member council in June.

He said that on Sunday, the North proposed to the South to establish a "working-level contact" for "high-level military talks between the two sides."

Sin also called on the council to "take measures helpful to the realization of the DPRK's (North Korea's) proposal... to verify objectively the truth of the incident before dealing with the unilateral 'investigation result' of the United States and South Korea."

Seoul issued a written response Wednesday, reminding Pyongyang that a formal mechanism for contact between the two countries has existed since the Korean war ended in stalemate and armistice in 1953, though the North and South still technically remain at war.

"Under the terms of the armistice agreement, it is the mission of the Military Armistice Commission to deal with violations of the agreement," South Korea said in its letter to Mexico's mission at the UN.

The North's proposal emerged just as Pyongyang warned on Tuesday that any accidental clash during an upcoming US-South Korea naval exercise could spark "all-out war," as tensions remained high over the Cheonan incident.

The United States and South Korea are planning a special naval exercise as a show of strength in response to the sinking, which they blame on the North. No dates have been announced.

Seoul announced its own reprisals and also wants the Security Council to censure the North. Pyongyang has threatened a military response to any UN action.

China has not backed any UN condemnation of the North and has not publicly accused its traditional ally of being behind the warship sinking.

US President Barack Obama, in weekend comments at a G20 meeting in Canada, accused China of turning a blind eye to its ally's "unacceptable" actions -- a claim rejected by Beijing.