SEOUL -- The United States prepared to propose a ban on arms purchases from North Korea on Wednesday as sirens wailed and traffic stopped in a South Korean civil defense drill. The Clinton administration has decided to seek a ban on North Korean arms purchases and sales as a first stage of sanctions, U.S. officials said Wednesday in Washington. The United States also will propose to the UN Security Council a ban on non-commercial flights to prevent North Korea transporting weapons and is asking the United Nations to suspend development programs in North Korea. While the drill and sanctions threat indicated alarm, former U.S. President Jimmy Carter was in North Korea to try to reduce tensions by discussing the Communist state's nuclear program with its leaders. President Clinton hoped Carter would get "a better sense from them about where they are and that they will understand that we are very firm in our position." The Korean Central News Agency, North Korea's official news agency, said Foreign Minister Kim Yong Nam told Carter that if the United States discards "the concept of confrontation with us, the pending issues between (North Korea) and the United States, including the nuclear issue, will be solved satisfactorily." North Korea has said demands that international inspectors be allowed to verify that the isolated Communist nation isn't producing nuclear weapons are a violation of its sovereignty. It insists its nuclear research is peaceful and warned that imposing sanctions would be a declaration of war. The Korean Central News Agency, in a partial account, quoted Carter as telling Kim, "I believe that as soon as the nuclear issue is resolved clearly and the misunderstandings are removed we can make progress for the other goals." Seoul was preparing for the worst, with mock bomb and gas attacks on Wednesday. The government ordered a check of underground shelters and emergency water supplies, put the military on high alert and police on special guard against saboteurs and infiltrators. Meanwhile, authorities are also trying to calm the public. Many South Koreans have begun hoarding canned food, emptying shelves of gas masks and withdrawing cash from savings accounts. The stock market tumbled for a second straight day Wednesday. The civil defense drill was supposed to have mobilized 6,700 reservists, six helicopters, 10 armored vehicles and a dozen fire trucks in central Seoul. But the actual exercise used only 2,600 police and firemen, and no helicopters or armed vehicles. In a plaza across from the rail station Wednesday, soldiers in gas masks practiced marking off contaminated areas in a mock chemical attack. Earlier this week, the North pulled out of the International Atomic Energy Agency, which oversees compliance with the Nuclear Non-Proliferation Treaty. But two IAEA inspectors remained in the North, and spokesman David Kyd of the Vienna-based agency said Wednesday morning they had not yet been asked to leave. China, North Korea's last major ally, deplored the escalating crisis. "The Chinese government once again appeals to all the parties concerned to be cool-headed, exercise restraint and make every effort for an earlier resumption" of negotiations to resolve the standoff, said a Foreign Ministry statement carried by the official Xinhua news agency. Carter traveled to North Korea through the truce village of Panmunjom inside the demilitarized zone. At some point during his trip, Carter is expected to meet North Korean President Kim Il Sung.