Myanmar's military junta Tuesday shrugged off international steps to punish the regime for its bloody crackdown on protests, even as Japan cut aid and European nations widened sanctions.

State media insisted there were no political prisoners in the country, and criticised a UN Security Council statement slamming the violence used to quell the biggest anti-government protests in nearly two decades.

The response came amid growing international pressure on the regime to halt its repression and launch talks with the pro-democracy opposition led by Aung San Suu Kyi.

Japan, one of Myanmar's main donors, said Tuesday it was cancelling grants of about 4.7 million dollars over the fatal shooting of a Japanese journalist when security forces put down last month's huge protests.

On Monday, European Union foreign ministers approved a new set of sanctions against the junta including an embargo on the export of wood, gems and metals, and threatened further penalties.

US President George W. Bush, whose country has imposed targeted sanctions against junta leaders, called for "enormous international pressure, to make it clear to the generals that they will be completely isolated and not accepted into the international community."

But Myanmar vowed to resist, saying in state media that: "We will march on. There is no reason to change the course."

"We will remove all the hindrances and obstacles that may lie ahead," the official New Light of Myanmar daily said.

The newspaper criticised last week's Security Council statement deploring the crackdown and calling for the release of political prisoners.

"The situation in Myanmar does not constitute a threat to the regional and international peace and security," it said.

"In reality, there is no one in Myanmar who is in prison for political reasons. There are only those against whom action has been taken in violation of the existing laws."

It added: "Anti-government groups inside and outside the nation are making and exaggerating fabricated news to create public panic."

Last month's protests led by Buddhist monks drew up to 100,000 people onto the streets in what escalated into the most potent threat to the regime since student-led demonstrations were crushed in 1988.

But they were violently broken up by troops and riot police in an operation that left at least 13 people dead and more than 2,000 locked up.

The United Nations sent Ibrahim Gambari, a top trouble-shooter, to Myanmar after the crackdown to meet junta chief Than Shwe and Aung San Suu Kyi, who is held in detention at her Yangon home.

Gambari returned to the region Monday at the start of a regional tour aimed at building pressure on the regime, saying in Bangkok that reports of further arrests of activists were "extremely disturbing."

Since the start of October, Than Shwe has made a heavily conditioned offer of direct talks with Aung San Suu Kyi provided she drops support for sanctions and ends "confrontational" policies.

The regime has also eased its curfew and restored Internet access that had been cut off during the protests.

At the same time, security forces have kept up the pressure on dissidents, arresting six more activists at the weekend, according to rights group Amnesty International.

Aung San Suu Kyi's National League for Democracy -- which won elections in 1990 but has never been allowed to govern -- said any dialogue with the junta would be jeopardised if the regime continued to hunt down activists.

Gambari travelled Tuesday to Malaysia where he said he planned to pass on a message from UN chief Ban Ki-moon on how neighbouring countries and Southeast Asian nations could help ease the crisis in Myanmar.

The Nigerian diplomat will fly on to Indonesia, India, China and Japan. He has said he aims to return to Myanmar by mid-November but hopes the junta will allow him to visit sooner.