US President Donald Trump says he walked away from a nuclear deal at a summit with North Korean leader Kim Jong Un because of unacceptable demands to lift sanctions.
Earlier, both Mr Trump and Mr Kim had expressed hope for progress on improving relations and on the key issue of denuclearisation, in their talks in the Vietnamese capital, Hanoi, their second summit in eight months.
"It was all about the sanctions," Mr Trump said at a news conference after the talks were cut short. "Basically they wanted the sanctions lifted in their entirety, and we couldn't do that."
The United Nations and the United States ratcheted up sanctions on North Korea when the reclusive state undertook a series of nuclear and ballistic missile tests in 2017, cutting off its main sources hard cash.
Both Mr Trump and Mr Kim left the venue of their talks, the Metropole hotel, without attending a planned lunch together, and returned to their hotels.
"Sometimes you have to walk, and this was just one of those times," Mr Trump said, adding "it was a friendly walk".
Failure to reach an agreement marks a setback for Mr Trump, a self-styled dealmaker under pressure at home over his ties to Russia and testimony from Michael Cohen, his former personal lawyer who accused him of breaking the law while in office.
Watch President Trump's press conference here:
Mr Trump said Cohen "lied a lot" during Congressional testimony in Washington today, though he had told the truth when he said there had been "no collusion" with Russia.
Since their first summit in Singapore in June, Mr Trump has stressed the good chemistry he has with Kim, but there have been questions about whether the bonhomie could move them beyond summit pageantry to substantive progress on eliminating a North Korean nuclear arsenal that threatens the United States.
While Mr Trump had said he was in "no rush" to strike a deal with North Korea, and wanted to do the right deal with Mr Kim, the White House had been confident enough to schedule a "joint agreement signing ceremony" at the conclusion of talks.
There was no indication of when the leaders might meet again but the White House said the "respective teams look forward to meeting in the future".
The Singapore summit, the first between a sitting US president and a North Korean leader, produced a vague statement in which Mr Kim pledged to work toward denuclearisation of the Korean peninsula.
But little progress followed.
Kicking off their second day in Hanoi, Mr Trump said he would be happy as long as North Korea conducted no more nuclear or intercontinental ballistic missile tests.
North Korea has conducted no nuclear or intercontinental ballistic missile tests since late 2017.
Mr Trump said Mr Kim had promised him there would be no more.
Mr Trump said he and Mr Kim had discussed dismantling North Korea's main nuclear facility at Yongbyon, which Mr Kim was willing to do, but he had wanted sanctions relief.
"We asked him to some more and he was unprepared to do that," US Secretary of State Mike Pompeo told the news conference, referring to Mr Kim.
Mr Trump said the United States would be able to inspect some North Korean facilities but he did not go into specifics.
Vietnam's foreign ministry said in a statement Mr Kim will begin a two-day official visit to Vietnam on Friday.
Vietnam's foreign ministry did not release details of Mr Kim's schedule but said the visit would last until Saturday.
Mr Trump was due to leave Vietnam and return to the United States tonight.
A North Korean delegation led by Vice Minister Ri Kil-Song has also left for China, the Korean Central News Agency said.
Markets lower after news of summit end
News of the summit failure sent South Korea's currency lower and knocked regional stock markets. South Korea's Kospi index closed 1.8 percent lower, marking the biggest one-day percentage loss since October 2018.
While Mr Trump indicated a more flexible stance in the run-up to the Hanoi summit, critics had warned that he risked squandering vital leverage over North Korea if he gave away too much, too quickly.
US intelligence officials have said there is no sign North Korea would eve give up its entire arsenal of nuclear weapons, which Mr Kim's ruling family sees as vital to its survival.
While the United States has long demanded that North Korea give up all of its nuclear and missile programmes, the North wants to see the removal of a US nuclear umbrella for its Asian allies such as South Korea and Japan.
Earlier Mr Kim and Mr Trump, seated across from each other at a conference table, appeared confident of progress, and Mr Kim had suggested he was ready to give up his nuclear bombs.
"If I'm not willing to do that, I won't be here right now," Mr Kim told reporters through an interpreter, when asked if he was ready to give up his nuclear weapons.
Mr Trump, responding to that, said: "That might be the best answer you've ever heard."