South Korean marines were poised on Saturday to conduct a live-fire drill off the west coast despite a threat by the North to launch a new strike and Beijing's call for restraint from the rival states.
A US troubleshooter, Governor Bill Richardson of New Mexico, called the situation "a tinderbox" and urged the North to let the rival South conduct exercises.
Analysts were sceptical the North would carry out its threat issued on Friday, rattling financial markets in the face of a vow by the South to retaliate against any attack by Pyongyang.
The military said the exercise, planned for Dec 18-21, would go ahead off this small island 80 km off the coast, which sustained a North Korean bombardment last month.
"We will not be issuing any announcement of our plan, except reporters on the island will be notified two or three hours in advance," a marine corps officer said, requesting anonymity.
Fog and brisk winds could push the drill beyond Saturday, Yonhap news agency quoted military officials as saying.
North Korea said on Friday it would strike with a stronger force than last month's bombardment, in which it rained 170 rounds of artillery on Yeonpyeong, killing four people. South Korea hit back with 80 rounds.
China, the North's main backer, issued a renewed plea on Saturday urging restraint, saying any fresh clash between the Koreas could shake regional stability. But in its hands-off stance on the rift, it singled out neither side in the call to hold back from harmful action.
"The situation on the Korean peninsula is now particularly complex and sensitive, and China is highly concerned," Chinese Foreign Ministry spokeswoman Jiang Yu said.
"China resolutely opposes, without the least ambiguity, any actions that could lead to a deterioration and escalation in the situation and wreck regional peace and stability."
Russia called on South Korea to halt plans for the drill, summoning the ambassadors from Seoul and Washington to express "extreme concern" over the exercise.
"ENORMOUS POTENTIAL FOR MISCALCULATION"
In Pyongyang, Governor Richardson of New Mexico, on a private mission to cool tensions, described the situation as "a tinderbox" and urged the North to let the South proceed with the exercises.
"There's enormous potential for miscalculation," he said in a telephone interview with CNN. "I'm urging (the North) extreme restraint ... Let's cool things down."
The State Department underscored the US stance that South Korea had every right to conduct the exercises, but indicated that it, too, was worried.
"We are absolutely concerned about the current trajectory," State Department spokesman PJ Crowley said, adding that Pyongyang was responsible for raising the tensions.
"We trust that South Korea will be very cautious in terms of what it does, but that said, let's put the responsibility squarely where it lies," he said.
North Korea is seeking the restart of six-party talks with the United States, China, South Korea, Japan and Russia aimed at persuading Pyongyang to abandon its nuclear programme.
It wants the talks to resume without preconditions, something Washington and South Korea have ruled out because they do not want to reward Pyongyang for hostile actions.
Analysts say the North uses the threat of attacks and even nuclear conflict to win concessions such as food and economic aid at talks over its nuclear stockpile.
At the same time as the poor, reclusive country is pushing for aid, the North is also in the throes of a potential leadership succession as ailing leader Kim Jong-il grooms his youngest son, Kim Jong-un, as the next ruler.