North Korea came under fresh sanctions after testing an atom bomb on October 9, while Iran also faces threats of punitive measures for refusing to freeze nuclear enrichment.

"Sanctions alone do not resolve issues," ElBaradei, the chief of the International Atomic Energy Agency, told a news conference in Tokyo.

"The focus in addition to sanctions should be on how to bring North Korea back to the negotiating table, how to make sure that North Korea shows the necessary flexibility, and ultimately to be able to succeed in defusing the nuclear crisis in North Korea.

"The same applies to the situation in Iran," he said. "You can use sanctions but sanctions alone as we know by experience will not resolve issues. You need to use incentives and disincentives."

While the IAEA has been investigating Iran's nuclear program since February 2003, North Korea kicked out inspectors from the UN watchdog in 2002 amid escalating tensions with Washington.

ElBaradei repeated that IAEA inspectors were ready to return as soon as North Korea "has given the green light."

"We can go back on very short notice. Now we see that there is that prospect so our people are making themselves ready, preparing themselves to go back."

"It might not be a comprehensive inspection at the beginning. It might be a gradual, incremental process but I think that would be a very important step in the right direction," he said.

North Korea agreed on October 31 to return to stalled six-nation disarmament talks.

But two days of meetings this week in Beijing involving US and North Korean envoys failed to set a date for the next round of negotiations, which also bring together China, Japan, Russia and South Korea.

The US and Japan led a drive that imposed further sanctions on the North after its nuclear test.

The atomic watchdog chief said that the North's test "sends the wrong message and sets a dangerous precedent."

Washington has also called for UN sanctions against Iran in response to its sensitive nuclear work. But Russia and China have been more cautious.

ElBaradei arrived in Japan on Wednesday and met Thursday with Foreign Minister Taro Aso. He heads to China on Monday.

Aso has led calls for Japan to consider going nuclear in the wake of North Korea's test.

But Chief Cabinet Secretary Yasuhisa Shiozaki told ElBaradei Friday that Japan stood by its 1967 three-point policy of refusing the production, possession or presence of nuclear weapons on its soil, the foreign ministry said.

"I have been assured, obviously, by government officials here in Japan that Japan has no intention to abandon its non-nuclear policy," ElBaradei said.

"Clearly Japan is concerned about the ramification of the (North Korea) situation. It clearly has negative regional security implications and it is legitimate for every country to assess its security in light of regional developments," he added.

Japan is the only country to have suffered a nuclear attack. US nuclear bombs obliterated the Japanese cities of Hiroshima and Nagasaki in the closing days of World War II, killing more than 210,000 people.

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