Addressing reporters after talks with South Korea's president and leaders of the 28,000-strong US military contingent in the country, Kerry also said it was up to China, North Korea's sole major ally, to "put some teeth" into efforts to press Pyongyang to abandon its nuclear ambitions.
Kerry, like other US officials, played down an assessment from the Pentagon's intelligence agency that North Korea already had a nuclear missile capacity.
In Washington, White House spokesman Jay Carney told reporters, "I want to be clear that North Korea has not demonstrated the capability to deploy a nuclear-armed missile."
Kerry said the United States wanted to resume talks about North Korea's earlier pledges to halt its nuclear programme.
But Kerry added that the United States would defend its allies in the region if necessary, and pointedly said Kim Jong-un, the North Korean leader, "needs to understand, as I think he probably does, what the outcome of a conflict would be."
North Korea has said it will not abandon nuclear weapons that it called on Friday its "treasured" guarantor of security.
Kerry's visit coincided with preparations for Monday's anniversary of North Korean state founder Kim Il-Sung's birth date, a possible pretext for a show of strength, with speculation focusing on a possible new missile test launch.
Kerry, due to flies to China on Saturday and to Japan on Sunday, said if North Korea's 30-year-old leader went ahead with the launch, "he will be choosing, wilfully, to ignore the entire international community."
"I would say ahead of time that it is a huge mistake for him to choose to do that because it will further isolate his country and further isolate his people, who frankly are desperate for food, not missile launches."
'SIMPLY UNACCEPTABLE'
North Korea has issued weeks of threats of an impending war following the imposition of U.N. sanctions in response to its third nuclear test in February. Kerry said the threats were "simply unacceptable" by any standard.
"We are all united in the fact that North Korea will not be accepted as a nuclear power," he said.
Kerry later told US executives in Seoul that China, as an advocate of denuclearisation, was in a position to press for a change in North Korea's policy.
"The reality is that if your policy is denuclearisation and it is theirs as it is ours, as it is everybody's except the North at this moment ... if that's your policy, you've got to put some teeth into it," he told the gathering.
North Korea showed little inclination for further talks.
Rodong Sinmun, the mouthpiece of the ruling Workers' Party, said North Korea would never abandon its nuclear programme.
"The DPRK will hold tighter the treasured sword, nuclear weapons," it said, referring to the country by its official name, the Democratic People's Republic of Korea.
North Korean state television showed footage of newscasts from other countries depicting the trajectory a North Korean missile launch might take.
It also showed preparations for the Kim Il-Sung birthday festivities, including floral tributes and a stadium of thousands of school children of the Korean Children's Union, each wearing a red scarf and saluting and marching in unison.
Speculation has mounted of an impending medium-range missile test launch in North Korea after reports in South Korea and the United States that as many as five medium-range missiles have been moved into position on the country's east coast.
Officials in both countries believe North Korea is preparing to test-launch a Musudan missile, whose range of 3,500 km (2,100 miles) or more would put Japan within striking distance and may threaten the island of Guam, which houses US military bases.
North Korea has been angry about annual military drills between US and South Korean forces, describing them as a "hostile" act. The United States dispatched B52 and B2 stealth bombers from their bases to take part.
'MODERATE CONFIDENCE'
Hours before Kerry's arrival, a US lawmaker on Thursday quoted a report by the US Defence Intelligence Agency, one of the 17 bodies that make up the US intelligence community, as saying it had "moderate confidence" North Korea had developed a nuclear bomb that could be fitted on a ballistic missile.
Kerry poured cold water on the report and said it was "inaccurate to suggest that the DPRK has fully tested, developed capabilities" as set down in the document.
US sources said the report was part of a very preliminary assessment not intended to be made public and never reached the senior levels of the American government.
In addition, South Korea's Defence Ministry said it did not believe North Korea could mount a nuclear warhead on a missile.
A US official had earlier suggested that Washington's greatest concern was the possibility of unexpected developments linked to Kim Jong-un's "youth and inexperience." Asked if war seemed imminent, he replied: "Not at all."
In a meeting between a Russian official and Pyongyang's ambassador to Moscow, Russia urged North Korea to avoid doing anything to further increase tension on the Korean Peninsula, the Russian Foreign Ministry said.
South Korean President Park Geun-hye, meeting officials from her ruling Saenuri Party before her talks with Kerry, struck a conciliatory note by suggesting Seoul should at least listen to what North Korea had to say.
"We have a lot of issues, including the Kaesong industrial zone," local media quoted her as saying. "So should we not meet with them and ask: 'Just what are you trying to do?'"
Park was referring to North Korea's closure this week of the jointly run Kaesong industrial park, with the loss of 53,000 jobs.
Kerry said the United States would not object to the South talking to the North. He also did not rule out the possibility of US aid some day flowing to North Korea, but suggested this could only happen if Pyongyang undertakes real denuclearisation.
Kerry sounded upbeat about resolving a dispute between the United States and South Korea over a civil nuclear cooperation agreement that expires next year, saying he thinks a compromise could be found by the time of Park's visit to Washington next month.
South Korea is believed to want the right to reprocess its spent nuclear fuel, which would allow it to deal with a mounting stockpile of nuclear waste. This could also allow it to produce bomb-grade fissile material, a step Washington is loathe to see in part because of its nuclear standoffs with Iran and North Korea.
