U.S. Secretary of State Mike Pompeo on Friday pushed Japan and South Korea to resolve their bitter dispute over trade policy and wartime history as bad blood between the Washington allies threatens to undermine their ability to respond to security threats.

After a three-way meeting including Foreign Minister Taro Kono, South Korean Foreign Minister Kang Kyung-wha told reporters that Pompeo offered to "play a role" in resolving the spat.

But a Japanese official later told a press briefing that no such comment was made and that Pompeo merely "encouraged" the countries to find a way forward.

"We did not take it as an offer to mediate," the official said.

The differing accounts of the talks, held on the sidelines of meetings with the Association of Southeast Asian Nations, highlighted the battered state of Japan-South Korea relations, which are arguably at their lowest point in decades.

The Cabinet on Friday approved plans to remove South Korea from a "whitelist" of countries that enjoy minimum restrictions on buying goods that can be diverted for military use.

The United States is concerned that the growing enmity between its biggest allies in the region is detrimental to their three-way ability to counter security threats from the likes of North Korea, which on Friday carried out its third missile launch in little more than a week.