North Korea says it will not retaliate despite what it says was the reckless provocation of South Korea carrying out a live fire exercise on an island near their disputed maritime border.
The north shelled the island of Yeongpyeong on 23 November and threatened a strong response to Monday's exercise, which lasted 90 minutes.
State media KCNA quoted the army as saying it was not worth reacting.
UN Security Council talks ended without a deal on Sunday, reportedly after China refused to agree to a statement critical of the North.
Russia also renewed its calls for both sides to show restraint.
The BBC reports the government in South Korea is under huge domestic pressure to take a tough stance towards Pyongyang, in the wake of the shelling of Yeonpyeong, which killed two marines and two civilians.
The incident was the first time the North had shelled civilian areas since end of the Korean War in 1953.
Meanwhile, CNN reports North Korea has offered to allow United Nations nuclear inspections to resume following talks in Pyongyang.
CNN says North Korea has also agreed to negotiate the sale of 12,000 fresh fuel rods and ship them to an outside country, presumably to South Korea.