WASHINGTON -- A nuclear-powered U.S. Navy strike group and Japanese destroyers are now operating within striking range of North Korea, a show of force meant to counter leader Kim Jong Un's continued missile tests.

The latest test came just Friday afternoon.

In an interview with Reuters on Thursday, President Trump sounded a warning.

"There is a chance that we could end up having a major, major conflict with North Korea," he said.

His comments rattled U.S. ally South Korea, whose leaders were also surprised to hear Mr. Trump insist that they pay $1 billion for a controversial missile defense system. The U.S. installed it earlier this week and last year agreed to pay for its operation in a signed accord.

"It's the most incredible equipment you have ever seen. It shoots missiles right out of the sky. And it protects them. I want to protect them. We are going to protect them," Mr. Trump said.

Despite Mr. Trump's heated rhetoric, at the United Nations Friday, Secretary of State Rex Tillerson said the U.S. is not looking for a fight.

"We much prefer a negotiated solution to this problem," he said.

Tillerson offered direct negotiations with North Korea and outlined the Trump administration's plan to force Kim Jong Un to the table.

He proposed choking its economy with more sanctions and asked other countries to cut off diplomatic relations and to no longer hire North Koreans as cheap labor.

"The United States also would much prefer countries and people in question own up to their lapses and correct their behavior themselves," Tillerson said.

Mr. Trump also expressed some empathy for Kim, saying he appreciates that he took over a regime at a young age, likely feels threatened and is in a difficult spot.