South Korea's president has held a nationwide address to announce stern measures against North Korea, including a halt in trade between the two countries. South Korea and the United States say Pyongyang is responsible for sinking a South Korean navy ship.
President Lee Myung-bak on Monday said North Korean must pay for sinking one of South Korea's navy ships.
Mr. Lee says inter-Korean exchanges are also being put on hold. In addition, North Korean vessels will no longer be allowed to sail through South Korean waters.
Forty-six South Korean sailors died in March when an explosion ripped their patrol ship in half. A multinational team concluded a North Korean submarine fired a torpedo at it, a finding Pyongyang calls a "fabrication."
President Lee says the military will defend South Korea if the North encroaches on its territory. However, he emphasizes the South does not seek armed conflict.
President Lee says minimal humanitarian aid to the impoverished North will continue.
In Beijing, U.S. Secretary of State Hillary Clinton urged China to work with Washington in responding to the sinking of the South Korean ship.