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The US has said it will work to remove Sudan from Washington's terror list, so long as Khartoum ends its relationship with North Korea.

Washington has been stepping up pressure on Sudan to cut ties with North Korea, despite Khartoum having no official ties with the pariah state.

But Sudan has now acknowledged some ties with Pyongyang as he announced that arms companies had scrapped ties with North Korea.

"North Korea is a paramount national security priority for the United States," said US Charge D'Affaires in Khartoum, Steven Koutsis, in remarks marking the 4 July celebration at the embassy in the Sudanese capital.

"For this reason, we would like to emphasise our appreciation for actions taken by Sudan and all our allies and partners around the world who support our diplomatic and economic pressure on the North Korean regime."

A US trade embargo on Sudan was dropped in October, although Khartoum was kept on a "state sponsors of terrorism" list. 

Sudan has been eager to be removed from this list, with financial difficulties hitting the African country hard.

Sudan lost much of its oil revenues when the south split in 2011, and has a high debt of $50 billion.

If Sudan is removed from the list, businesses will be much more likely to invest in the country.

"Many challenges remain. Most are for the Sudanese to resolve," said Koutsis.

"But I cannot deny that as long as Sudan remains on the list of state sponsors of terrorism those challenges will be harder to overcome."

"I pledge to you that this embassy will work with all its energy and focus to create the conditions for Sudan's removal from the list."

Sudan was sanctioned in 1997 over its links to terror groups, such as Osama bin Laden's al-Qaeda who lived in the country between 1992 and 1996.

Relations between the two countries improved under President Barack Obama, until sanctions were lifted by Donald Trump last year.