The high-level North Korean delegation, headed by Kim Yong Nam, the North's ceremonial head of state, will arrive in South Korea on Friday on a special plane to attend the opening ceremony of the Winter Olympics later in the day.
USA officials declined to offer details on the expected new sanctions beyond Pence's comments, citing concerns that any additional information could be used by those trying to skirt the new measures.
1 of 9 North Korean leader Kim Jong Un, right, and his wife Ri Sol Ju arrive at a military parade in Pyongyang on February 8, 2018.
With Pyongyang on an Olympics-linked publicity drive - sending a troupe of performers, hundreds of female cheerleaders and the sister of leader Kim Jong-Un to the South - Mr Pence said the USA "will not allow North Korean propaganda to hijack the message and imagery of the Olympic Games".
Pence's strenuous efforts to highlight the threat from the North and its treatment of its people present a dilemma for Moon. In 2000, her father, Kim Jong Il, held a summit meeting in North Korea with Kim Dae-jung, then South Korea's president, but did not keep his promise to visit for a second meeting.
Off in the distance, North Korea's flag was high in the air, flying above the propaganda village.
"We have no intention whatsoever to meet USA authorities during our visit to the South", a senior foreign ministry official was quoted as saying by the North's official KCNA news agency.
Even as it held the parade, the North is on an Olympics-linked charm offensive - sending a troupe of performers, hundreds of female cheerleaders and Mr Kim Jong Un's sister to South Korea.
"We are not going to use such a sports festival as the Winter Olympics as a political lever", the official reportedly said.
Pence told reporters that despite disagreements over how to approach North Korea, the state of the alliance between the US and South Korea is "strong".
"We'll continue to seize every opportunity to ensure that North Korea does not use the powerful imagery and backdrop of the Olympics to paper over an appalling record of human rights and a pattern of developing weapons and conducting the kind of missile launches that are threatening our nation and threatening neighbours across the region", Pence said.
"Explicitly speaking, we have no intention to meet with the United States side during the stay in South Korea".
In opening remarks during his meeting with Moon, Pence said the United States would never waver in its goal of getting North Korea to give up its nuclear and ballistic missile programme through strong pressure, an aim shared with South Korea. "We will have to wait and see exactly how that unfolds", he said.