An unofficial United States envoy visiting North Korea has warned that the situation on the peninsula is a "tinderbox".
Bill Richardson says there is enormous potential for miscalculation as Seoul readies for military exercises off Yeonpyeong island.
South Korean marines are poised to conduct a live-fire drill off the west coast despite a threat by the North to launch a new strike and a call by China for restraint from the rival states.
The BBC reports Mr Richardson has asked officials in Pyongyang to exercise extreme restraint.
He urged the North to allow South Korea go ahead with planned live-firing exercises on the island, which was shelled by the North last month.
Pyongyang has been threatening to strike back if the drill goes ahead.
Russia calls for cancellation
Russia - which shares a border with North Korea - has urged US and South Korean envoys to cancel the exercises, saying Moscow was "deeply concerned" about rising tensions in the region.
The situation has rattled financial markets in the face of a vow by South Korea to retaliate against any attack by the North.
Two marines and two civilians died in the shelling of the island on 23 November.
North Korea says its bombardment of Yeonpyeong was a response to the last live-fire exercises held there.
The South Korean military said the guns would be aimed away from North Korea.
The BBC reports the incident has inflamed tensions on the Korean Peninsula, which were already high after the sinking of a South Korean warship in March.
South Korea and the United States have since carried out large-scale military exercises in the Yellow Sea.
