AFP

The United States has vowed to defend its ally South Korea after North Korea rained artillery shells on its neighbour on Tuesday, killing two people and touching off widespread alarm in world capitals.

In a powerfully worded statement, the White House said the United States "strongly condemns this attack and calls on North Korea to halt its belligerent action".

It also urged nuclear-armed North Korea to "fully abide by the terms of the Armistice Agreement" that ended the Korean War of 1950-53.

"The United States is firmly committed to the defence of our ally, the Republic of (South) Korea, and to the maintenance of regional peace and stability," it said.

Condemnation of Pyongyang's action also came from Russia, Japan and Western Europe.

China - North Korea's sole major ally and economic prop - while expressing concern over the cross-border firing, appealed for stalled six-party nuclear talks to resume.

In one of the most serious border incidents since the Korean War, South Korean troops fired back with cannon, the Seoul government convened in an underground war room and "multiple" air force jets were scrambled.

Pyongyang, however, said South Korea fired first in Tuesday's cross-border artillery duel, which killed two marines and injured 18 soldiers and civilians on a South Korean border island.

Japanese Prime Minister Naoto Kan, whose country has long had difficult relations with the reclusive communist state, ordered his government to prepare for any eventuality.

"I ordered (ministers) to make preparations so that we can react firmly, should any unexpected event occur," Kan told reporters after an emergency meeting of cabinet members and senior officials.

"I ordered them to do their utmost to gather information."

Russian Foreign Minister Sergei Lavrov condemned the shelling, warning of "colossal danger" from Korean tensions and calling for an end to any hostilities.

"This could degenerate into military actions. This is a colossal danger which we need to avoid with all possible means," he said.

British Foreign Secretary William Hague slammed what he called Pyongyang's "unprovoked attack", saying it would lead to further tensions on the peninsula.

"The UK strongly condemns North Korea's unprovoked attack on the South Korean island of Yeonpyeong Island. Such unprovoked attacks will only lead to further tensions on the Korean peninsula," Hague said.

German Foreign Minister Guido Westerwelle warned the incident threatened peace in the region.

"I am very worried by the North Korean artillery fire on South Korea. This new military provocation threatens peace in the region," he said.

The European Union's chief diplomat, Catherine Ashton, joined in the condemnation, urging the communist regime to refrain from actions that could escalate tensions.

"I am deeply concerned by today's events on the Korean Peninsula, which have reportedly led to casualties among South Korean military and civilians," Ashton said in a statement.

"I call on the North Korean authorities to refrain from any action that risks further escalation and to fully respect the Korean Armistice Agreement."

Tuesday's incident came after nuclear-armed North Korea disclosed an apparently operational uranium enrichment program - a second potential way of building an atomic bomb - causing serious alarm among the US and its allies.

A long-running, but currently stalled, six-nation negotiation process hosted by China and including both Koreas, the United States, Japan and Russia, is seeking to shut down the North's nuclear weapons program.

China also expressed concern over the artillery incident.

"We have taken note of the relevant report and we express concern over the situation," foreign ministry spokesman Hong Lei told reporters.

"We hope the relevant parties do more to contribute to peace and stability on the Korean peninsula."

Hong said it was "imperative" the six-nation talks were restarted "as soon as possible".

"It is China's consistent and firm position to realise de-nuclearisation on the (Korean) peninsula through dialogue and consultation," Hong said.

North Korea abandoned the forum in April 2009, a month before its second nuclear test, and announced in September last year it had reached the final stage of enriching uranium.