The United States led a push at the UN Security Council for tougher sanctions on North Korea, while warning the isolated regime's launch of an intercontinental ballistic missile had drastically narrowed the path for diplomacy.
However, the United States missile defenses are able to defend the country from the "limited" threat from North Korea's missile capabilities, the Pentagon spokesman, Jeff Davis, emphasized.
North Korean leader Kim Jong Un's recent missile tests have raised fears of escalating tensions and the impact on South Korea's economy.
Haley also vowed to propose a new resolution to the council "proportionate to North Korea's new escalation".
"The United States is prepared to use the full range of our capabilities to defend ourselves and our allies".
After personally overseeing the test, the North's leader Kim Jong-un "said American bastards would be not very happy with this gift sent on the July 4 anniversary", the official Korean Central News Agency reported. We can hold senior regime officials accountable", she said, warning that the USA will take action not just against North Korea but "will look at any country that chooses to do business with this outlaw regime.
There was strong criticism of the Democratic People's Republic of Korea for its ICBM test at an emergency meeting of the U.N. Security Council.
The missile was launched from an airfield in Kusong, a city in North Korea's far northwestern corner, an area used for launches in the past. Hong Kong's Hang Seng rose 0.4 percent to 25,488.73 and the Shanghai Composite index in mainland China edged up 0.2 percent to 3,189.63. A unilateral military strike against North Korea could provoke it to attack South Korea with artillery.
"Instead of vague Twitter bluster, President Trump should answer North Korea's unsafe test with a coherent strategy of direct diplomacy with Pyongyang and increased economic sanctions pressure from China", said Democratic senator Edward Markey, who sits on the Senate Foreign Relations Committee.
Regional disarmament talks on North Korea's nuclear programme have been stalled since 2009.
"It can't work without it", he said.
Haley declined to provide details of the resolution, but said pointedly, "The options are all known to us".
In a test last month, a US -based missile interceptor knocked down a simulated incoming North Korean ICBM.
The decision to respond with ATACMS was made at a high level of the US government, though Davis would not say exactly who gave final authority to launch.
Back in April, Ms Haley was asked if the U.S. would use military force against North Korea.
The latest United States and South Korea drills held Wednesday were created to display both countries' own missile strength, Pentagon spokeswoman Dana White said in a statement. The Chairman used the launch to taunt the USA during its Independence Day holiday, calling the missile a "gift" to Americans. This week, however, North Korea tested a missile believed capable of hitting the nearest part of the United States, namely Alaska.
While the United States push for new sanctions won backing from France, it may well run into Chinese opposition, and raised immediate protests from fellow permanent Security Council member Russian Federation.