North Korea is pulling more than 50,000 workers out of the Kaesong joint industrial zone with South Korea, cutting its last direct economic link with its southern neighbor.
A senior ruling party official, Kim Yang Gon, told the official Korean Central News Agency that all operations in the zone will be suspended while officials decide whether to re-open it or close it permanently.
South Korean companies in the industrial zone contribute an estimated $90 million each year to the North Korean economy. Last week, North Korea blocked South Korean access to the zone.
Russian President Vladimir Putin warned Monday that any conflict on the Korean peninsula could be worse that the 1986 Chernobyl nuclear disaster. He said he hopes everyone will "calm down and work together."
In Washington, a White House spokesman praised actions by Russia and China to ease the crisis with North Korea.
"I can tell you that we welcome efforts by Beijing and Moscow to encourage Pyongyang to refrain from provocative rhetoric and threats."
On Sunday, Chinese President Xi Jinping did not name North Korea specifically but said no country "should be allowed to throw a region and even the whole world into chaos for selfish gain." Beijing is North Korea's sole financial and diplomatic backer.
In other developments Monday, there were mixed messages from Seoul about whether the North is preparing for a fourth nuclear test.
Unification Minister Ryoo Kihl-jae told lawmakers there are signs of activity at the North's Punggye-ri nuclear test site. Later, South Korea's Defense Ministry said it has seen no such evidence.
U.N. Secretary-General Ban Ki-moon, a Korean, urged North Korea to refrain from "further provocation." He said a fourth nuclear test would breach U.N. Security Council resolutions.
North Korea, angered by a new round of international sanctions following a recent nuclear test, has threatened to retaliate with attacks on the United States, South Korea and U.S. allies in the Asia-Pacific region. The North Korean military command recently announced it was "authorized" to attack the United States using "smaller, lighter and diversified" nuclear weapons.
On Monday, the commander of U.S. forces in South Korea, General James Thurman, canceled a scheduled trip to Washington to testify before several congressional committees this week. The military said that based on developments, it is prudent for Thurman to remain on the peninsula.
North Korea will mark the 101st anniversary of the birth of its founding father, Kim Il Sung, April 15 with pomp, ceremony and displays of military strength. Kim Il Sung led the communist country from 1948 until his death in 1994. His grandson, Kim Jong Un, currently holds power.