South Korea's government remains on high alert, watching for a North Korean response to the South's military exercises.
South Korean fighter jets and warships are patrolling for a second straight day, ready to react should North Korea launch a military strike.
The patrols continue even though Pyongyang said it did not intend to retaliate against South Korea's artillery training in disputed waters on Monday.
Defense Minister Kim Kwan-jin told lawmakers Tuesday that South Korean and U.S. forces are monitoring North Korea's military activities.
Kim says if North Korea undertakes another illegal military provocation, similar to the November 23rd shelling of Yeonpyeong island, the South Korean military will retaliate powerfully and firmly.
The defense minister says the country faces its most serious military crisis since 1953, when three years of civil war ended with a truce.
President Lee Myung-bak convened a National Security Council meeting Tuesday.
Officials say the council approved bolstering Seoul's crisis management system to respond to military provocation from the North.
While Pyongyang said Monday that not every South Korean provocation is worth a reaction, it also vowed to "blow up" U.S. and South Korean military bases if its territory is threatened.
Defense officials also say South Korean marines are on the highest level of alert atop a 150-meter hill about three kilometers south of the border.
For the first time in seven years, a church switched on Christmas lights on a tower on Aegibong hill at dusk Tuesday. The tower is visible from North Korea, which in the past considered the seasonal display to be propaganda warfare.
There are concerns that North Korea might fire on the illuminated steel Christmas tree.
A veteran American troubleshooter left Pyongyang on Tuesday. Bill Richardson, the governor of the U.S. state of New Mexico, said North Korea has shown "a certain pragmatism" by not retaliating after Monday's live-fire drill.
Richardson spoke to reporters at the airport in Beijing. The former ambassador to the United Nations acknowledged Pyongyang needs to act on the promises it made to him to defuse tension. They include a pledge to allow United Nations nuclear inspectors back into the country and to sell fresh fuel rods from its nuclear programs.
The governor says those gestures provide an opening to resume multi-national talks about ending North Korea's nuclear weapons programs. Pyongyang abandoned the talks more than 18 months ago.