The two allies are in a security alliance and Washington stations 28,500 troops in South Korea to defend it from the nuclear-armed North, which invaded in 1950.

They are a key part of US forces' deployment in Asia, but the Trump administration has been insisting Seoul pay more towards their costs.

The initial US demand was around $5 billion a year -- a more than fivefold increase on the roughly $900 million paid in 2019 -- provoking consternation in Seoul.

The latest round of negotiations concluded without an agreement in Washington on Wednesday.

US negotiators had "adjusted our position, our top line number", said Ambassador Harry Harris. "We are now waiting for the Korean side to do the same."

"South Korea as an equal partner in the preservation of peace on the peninsula, and its position as the 12th largest economy in the entire world, can and should do more."

Time was "of the essence", he told reporters in a group interview at his residence in the centre of Seoul.

Around 10,000 South Koreans working for United States Forces Korea (USFK) are paid from funds from last year's deal and when they run out, they will have to be put on furlough, he said. "That notice is going to go out soon."

Other US allies would face similar demands from Washington in the future, added Harris, a former Navy admiral and commander of US Pacific Command.

"Korea just happens to be the first country whose SMA expires," he said. "Japan is next. And then we go around from there."