South Korea has convened an emergency security meeting after the North threatened to demolish a liaison office and take military action against its rival.
Officials in Seoul also urged North Korea to uphold reconciliation agreements, amid the latest flare-up in cross-border tensions.
Concern remains that North Korea could turn to provocation to bolster its internal unity and seek outside concessions as nuclear talks with the United States remain deadlocked.
Observers say North Korea desperately needs relief from harsh US-led sanctions and the coronavirus pandemic.
South Korea’s national security director, Chung Eui-yong, held an emergency video conference with ministers in charge of security and military generals on Sunday morning to discuss the latest situation on the Korean Peninsula and the government’s possible steps, the presidential Blue House said in a statement.
The Unification Ministry, which handles relations with North Korea, later issued a statement saying both Koreas must strive to abide by all agreements they have reached. It said the South Korean government “views the current situation as grave”.
On Saturday night, Kim Yo Jong, the influential sister of North Korean leader Kim Jong Un, warned Seoul would soon witness “a tragic scene of the useless North-South liaison office (in North Korea) being completely collapsed”.
She also said she would leave to North Korea’s military the right to take the next step of retaliation against South Korea.
North Korea earlier suspended communication lines with South Korea and threatened to nullify 2018 agreements that led the Koreas to halt firing exercises, remove some land mines and tear down guard posts in front-line areas.
The North has linked its recent series of threats to Seoul’s failure to prevent activists from launching propaganda leaflets across their border.
But some experts say North Korea is deeply frustrated that South Korea has not done enough to revive lucrative joint economic projects, and by the lack of progress in its nuclear talks with Washington.
The negotiations have made little progress since a second summit between Kim Jong Un and US president Donald Trump early last year fell apart because of disputes over by how much sanctions should be lifted in return for Mr Kim’s dismantling his main nuclear complex.