North Korea has no interest in any policy or proposals for reconciliation from South Korea, the powerful sister of its leader Kim Jong Un said on Monday, in the first response to peace overtures by the South's liberal President Lee Jae Myung.

There had been cautious optimism in the South that the North might respond positively and even show willingness to return to dialogue after Pyongyang also shut off its propaganda loudspeakers, a move that Lee said came sooner than expected.

Kim Yo Jong, a senior official of North Korea's ruling party who is believed to speak for its leader, said Lee's pledge of commitment to the South Korea-US security alliance showed he was no different from his hostile predecessor.

"If South Korea expects to reverse all the consequences of (its actions) with a few sentimental words, there could be no greater miscalculation than that," Kim said in comments carried by the official KCNA news agency.

Lee, who took office on June 4 after winning a snap election following the removal of hardline conservative Yoon Suk Yeol over a failed attempt at martial law, has vowed to improve ties with Pyongyang that had reached their worst level in years.

Among gestures to ease tension, Lee suspended loudspeaker broadcasts blasting anti-North propaganda across the border and banned the balloon drops of leaflets by activists that had angered Pyongyang.

Kim, the North Korean official, called those moves merely a reversal of ill-intentioned activities South Korea should never have initiated.

"In other words, it's not even something worth our assessment," she said.

"We again make clear the official position that whatever policy is established in Seoul or proposal is made, we are not interested, and we will not be sitting down with South Korea and there is nothing to discuss."

Following the KCNA comments on Monday, Lee said it was important to restore trust between the neighbours.

South Korea's Unification Ministry, charged with handling ties between the two countries, said Kim Yo Jong's comments "show the wall of distrust between the South and the North is very high as a result of hostile and confrontational policy over the past few years".

South Korea will keep up efforts for reconciliation and cooperation with the North, ministry spokesperson Koo Byoung-sam told a briefing.

Its new unification minister, Chung Dong-young, said he planned to advise Lee to adjust joint military drills with the United States, Yonhap said. The exercises have been criticised by Pyongyang.

Still, Lee, whose government is embroiled in tough negotiations with Washington to avert punishing tariffs threatened by President Donald Trump, has called the US alliance the pillar of South Korea's diplomacy.

Seoul would make efforts in all areas to "strengthen the South Korea-US alliance that was sealed in blood", Lee said on the anniversary of the Korean War armistice on Sunday.

North Korea held a parade in its capital of Pyongyang to mark the event it calls victory day, though state media reports indicated it was on a smaller scale than in some previous years.

Columns of marching soldiers held portraits of commanders, including state founder Kim Il Sung, with spectators and frail veterans in historic army uniforms in attendance in state media pictures, which did not show major weapons in the parade.

A formation of military jets flew over the Pyongyang Gymnasium square trailing streaks of flares and fireworks. State media made no mention of leader Kim Jong Un's attendance.

The two Koreas, the United States and China, which were the main belligerents in the 1950-53 Korean War, have not signed a peace treaty.