South Korean President Lee Myung-bak says he is trying to prevent a broader conflict breaking out following North Korea's artillery barrage on a populated island along the two states' disputed maritime border.
Lee was speaking after leading an emergency meeting of the government in an underground war room.
South Korean media say Seoul has warned Pyongyang to halt its provocations or sustain a strong reaction.
Today's hour long attack caused the evacuation of civilians from Yeonpyeong Island and killed two marines and injured more than a dozen other people. Dozens of buildings were burning, with dense black smoke rising above the island.
F-16 fighter jets were immediately scrambled to guard against any intrusion of air space by North Korean aircraft.
The shelling apparently started when South Korea held a routine training exercise close to the disputed Yellow Sea maritime border. The South returned fire, and the incident quickly escalated.
The countries' western maritime boundary has been the scene of numerous clashes between the two Koreas in the past.
In March, a South Korean warship sank near the border, causing the deaths of 46 sailors. The South blamed a North Korean torpedo attack, the North denied responsibility.
Calls For Restraint
In Washington, the White House issued a statement "strongly condemning" North Korea's action today, while Russia warned the rise in tensions represented a "colossal danger."
"I think what happened has to be condemned," Russian Foreign Minister Sergei Lavrov said. "Those who initiated this and started shelling the South Korean island in the area of the DMZ [demilitarized zone] of course bear a huge responsibility. It is necessary immediately to stop any exchange of fire."
Japanese Prime Minister Naoto Kan said in Tokyo that he had told his government and military to be ready for all eventualities.
"Firstly I asked our people to put an all-out effort in gathering information on this incident. And secondly I asked that they prepare for all eventualities," Kan said. "Those are the two orders I just gave out."
In Europe, German Foreign Minister Guido Westerwelle expressed concern at the violence in Korea, and called for restraint.
"I am very worried about the latest development. The fact that violence was used is something that worries us in Europe," Westerwelle said. "We appeal to all participants to contain themselves, and that rationality and reconciliation prevail."
In Beijing, Foreign Ministry spokesman Hong Lei told a news conference that both sides of the Korean Peninsula should "do more to contribute to peace."
German-based international affairs analyst Sebastian Harnisch says that he believes China is working behind the scenes to dissuade the North Koreans from more aggressive behavior. He says Beijing has no interest in seeing clashes between the Koreas or with the United States.
"China is the most important power broker when it comes to reining in North Korea at this specific point in time, and I'm sure the Chinese government has sought to intervene with Pyongyang to prevent any further escalation," Harnisch says.
Chinese Foreign Ministry spokesman Hong also said it's imperative to return to six-party talks aimed at ending North Korea's nuclear weapons program.
However, the U.S. special envoy to North Korea, Stephen Bosworth, said today that there can be no resumption of the stalled talks while Pyongyang continues to expand its nuclear program.
Speaking in Beijing, Bosworth referred to the new uranium-enrichment facility which the North has just revealed. The facility, kept secret until this week, was visited by a prominent U.S. scientist, who described what he saw as "stunning."
Highly enriched uranium can be used to make nuclear weapons.
So why has the North hit the world with two shocks in the same week?
Analysts say the most likely reason is that the leadership in Pyongyang is seeking to put pressure on Washington in particular to return to the six-party talks, or to make other concessions.
Copyright (c) 2010. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.