The United States and South Korea say they are postponing their joint military maneuvers slated to take place in the coming days.
Washington and Seoul have cited a bid to bolster the stalled talks with North Korea over its nuclear program as the reason behind their decision.
The US, however, denied that the move amounted to another concession to the North, which has long protested the joint military drills.
“I don’t see this as a concession. I see this as a good faith effort ... to enable peace,” US Defense Secretary Mark Esper told reporters on Sunday, as he announced the decision standing alongside South Korean counterpart Jeong Kyeong-doo in Bangkok, Thailand.
Esper also said the US and South Korean militaries would remain at a high level of preparedness in spite of the move.
The Combined Flying Training Event would have simulated air combat scenarios, where warplanes from both countries would have taken part.
The move comes as North Korea has rebuffed a recent offer by the US to resume bilateral talks, saying accepting such negotiations would only help Washington pass a Pyongyang deadline for the former to adopt a more flexible approach.
The North has given the US until the end of the year to ease its stance towards the country.
Esper also said he was hopeful that Pyongyang would respond to the gesture.
"We encourage the DPRK to demonstrate the same goodwill as it considers decisions on conducting training, exercises and testing," he said, using the acronym for the North's official name, the Democratic People’s Republic of Korea.
"We also urge the DPRK to return to the negotiating table without precondition or hesitation."
The American and North Korean leaders agreed in June to resume denuclearization talks that stalled after a failed summit in Vietnam in February.
The Hanoi summit between North Korea’s leader Kim Jung-un and US President Donald Trump broke up because of disagreement over sanctions relief and what the North would be willing to give up in return.
The two countries' officials met for the first time since that decision in Stockholm last month.