"It's possible that something could be sped up," the official said of the potential for imposing a limited package of targeted sanctions on North Korea. "Something that's ready to go could be taken from the larger package and expedited."
The source said the ballistic missile launch was the kind of "provocation" that had been anticipated ahead of South Korea's May 9 election, and President Donald Trump could use the test-firing to further press China to do more to rein in North Korea.
US officials, speaking on condition of anonymity, said the missile fired from a region north of Pyongyang was probably a medium-range missile known as a KN-17 and appears to have broken up within minutes of taking off.
Should North Korea test-fire an intercontinental ballistic missile as it has threatened, Washington would consider it a more dangerous milestone, the administration official told Reuters, suggesting it would draw a much tougher US response.
The Trump administration is especially worried about Pyongyang's work to develop a nuclear-tipped missile capable of hitting the United States. Washington is also watching closely for the possibility of North Korea's sixth nuclear test.
The missile test came just hours after US Secretary of State Rex Tillerson warned the United Nations Security Council that failure to curb North Korea's nuclear and ballistic missile programs could lead to "catastrophic consequences."
The official said any new sanctions could be rolled out in coming days and may hit a number of entities that have already been "vetted" by the US government for such measures, while the administration continues crafting a broader sanctions package.
The targets, the official said, could include financial institutions and front companies in North Korea as well as China, which could anger Beijing.
While Trump has praised Chinese President Xi Jinping for signalling increased cooperation on the North Korea issue, the official said Beijing still "needs to draw some sort of line in the sand" with Pyongyang over its nuclear and missile programs.
The military options under active consideration include displays of US power in the region meant to deter North Korea and reassure US allies South Korea, the official said.
But it stops short of pre-emptive US military strikes, which could run the risk of massive North Korean retaliation and huge casualties in Japan and South Korea and among US forces in both countries.
(Reporting by Matt Spetalnick and David Brunnstrom; Editing by Sandra Maler and Mary Milliken)
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)