An area traffic control network system is considered in this paper. Optimal signal settings can be determined while trip rates and network flow are in equilibrium. This problem can be formulated as a nonlinear mathematical program with equilibrium constraints. For the objective function, the system performance can be defined as a function of signal setting variables. For the constraint set, a user equilibrium traffic assignment with elastic demand obeying Wardrop's first principle is formulated as a variational inequality problem. Due to the nonlinearity and non-differentiability of the perturbed solutions in equilibrium constraints, a non-smooth approach is investigated in this paper. Numerical tests are performed using a variety of example road networks to quantify the effectiveness and robustness of the proposed method. (C) 2010 Elsevier Ltd. All rights reserved.