By Jeff Mason and Steve Holland

WASHINGTON (Reuters) - U.S. President Donald Trump acknowledged on Wednesday it was unclear if his summit with North Korea would go ahead after Pyongyang threatened to pull out of the unprecedented meeting, a move that could deny him a potentially major foreign policy achievement.

North Korea threw into doubt the June 12 summit between its leader Kim Jong Un and Trump on Wednesday, saying it might not attend if Washington continues to demand it unilaterally abandon its nuclear arsenal. North Korea also called off talks with South Korea scheduled for Wednesday, blaming U.S.-South Korean military exercises.

"We'll have to see," Trump told reporters in the Oval Office when asked if the summit was still on, though he insisted he would not back down from his demand for North Korea's denuclearization.

"No decision, we haven't been notified at all ... We haven't seen anything, we haven't heard anything," he said.

Trump's muted response was in marked contrast to just a few days ago when he exulted over North Korea's release of three Americans, welcoming them home with praise for Kim and an expression of high hopes that the summit would produce "something very meaningful."

Trump's aides - who, according to one U.S. official, were caught off guard by North Korea's warning - were working on Wednesday to determine whether it was a negotiating ploy by Pyongyang or an attempt to scuttle the summit.

Cancellation of the summit, the first between U.S. and North Korean leaders, would deal a major blow to what would be the biggest diplomatic achievement of Trump's presidency. This comes at a time when his withdrawal from the Iran nuclear deal has drawn criticism internationally and his move of the U.S. embassy in Israel to Jerusalem has fueled deadly violence on the Israel-Gaza border.

Trump has raised expectations for the summit even as many analysts have been skeptical about the chances of bridging the gap because of questions about North Korea's willingness to give up a nuclear arsenal that it says can hit the United States.

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The White House said it was still hopeful the summit would take place, but Trump was prepared for a tough negotiation.

"The president is ready if the meeting takes place," White House spokeswoman Sarah Sanders 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." Pyongyang has a long history of threatening to walk away from negotiations if it does not get its way.

North Korea's first vice minister of foreign affairs, Kim Kye Gwan, cast doubt on whether the summit, which is set for Singapore, would be held.

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.

"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," he said.

North Korea clashed with Bolton when he worked under the Bush administration.

"We shed light on the quality of Bolton already in the past, and we do not hide our feeling of repugnance toward him," Kim, the vice minister, said.

In an interview with Fox News Radio, Bolton brushed aside the remarks against him and said odds were still in favor of the summit going ahead.

"We are going to do everything we can to come to a successful meeting, but we are not going to back away from the objective of that meeting which is complete, verifiable and irreversible denuclearization of North Korea," he said.

Sanders appeared reluctant to endorse the Libya model that the hawkish Bolton has touted, most recently on U.S. television news programs on Sunday.

She said the model that would be followed 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."

"MISERABLE FATE"

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.

North Korea had announced it would publicly shut its nuclear test site next week and also improved the mood for a summit by releasing the three detained Americans last week.

Some analysts and U.S. officials believe North Korea may be testing Trump’s willingness to soften the U.S. demand for complete denuclearization for the summit, which has prompted the president’s supporters to suggest he deserves to win the Nobel Peace Prize.

North Korea could also be trying to capitalize on an apparent gap in messaging between Bolton and U.S. Secretary of State Mike Pompeo.

Pompeo, who returned from his second visit to Pyongyang last week with the freed Americans, has taken a softer line than Bolton, stressing the economic benefits, possibly including U.S. investment, that could flow to the country if it agrees to denuclearize.

Kim Kye Gwan's statement appeared to reject such promises, 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, using the acronym for North Korea's official name, Democratic People's Republic of Korea.

North Korea defends its nuclear and missile programs as a deterrent against perceived aggression by the United States, which keeps 28,500 troops in South Korea, a legacy of the 1950-53 Korean War, which ended in a truce, not a peace treaty.

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” alliance with Seoul.

"This statement targets Bolton, and threatens the administration’s entire strategy. Suggests NK has not radically changed its strategy, & econ. inducements will not convince them to denuke," tweeted Abraham Denmark, former U.S. assistant secretary of defense for East Asia.

During his talks with Kim last week, Pompeo dealt more with summit logistics and the fate of the three American detainees instead of focusing on questions such as the two sides’ differing definitions of “denuclearization," according to U.S. officials, who spoke on condition of anonymity. Pompeo may have wanted to avoid aggravating tensions before Kim ordered the release of the prisoners, who flew home on the diplomat’s plane.

Pompeo and Singaporean Foreign Minister Vivian Balakrishnan spoke by phone on Wednesday about the planned summit, the State Department said.

North Korea said it was pulling out of the talks with South Korea 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 defense ministry official said the drills would go on as planned.

Speaking to reporters in Brussels on Wednesday, United Nations Secretary-General Antonio Guterres said: “I hope that in the end common sense will prevail, and the summit will take place and it will be successful."

(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; Writing by David Brunnstrom and Matt Spetalnick; Editing by Alistair Bell and James Dalgleish)