The US is urging China to use its influence over North Korea to defuse the crisis sparked by its shelling of an island in the Yellow Sea.
South Korea's defence minister Kim Tae-young has resigned following criticism of his handling of the attack.
He quit after the government announced it would be stepping up its military presence on Yeonpyeong and four neighbouring islands.
Two South Korean civilians and two marines died in the bombardment of Yeonpyeong, which lies near the disputed Yellow Sea border.
The attack, in which at least 18 people were injured, was the first of its kind since the 1950-53 Korean War.
TV pictures showed neighbourhoods reduced to rubble with shops and homes burnt and destroyed.
The US, which is due to hold joint military drills with the South from this Sunday, has called on China to take a tougher stance with its ally.
"China does have influence with North Korea and we would hope and expect that China will use that influence," said a State Department spokesman.
"First to reduce tensions that have arisen as a result of North Korean provocations and then secondly [to] continue to encourage North Korea to take affirmative steps to denuclearise."
Japanese officials have also encouraged China to take the lead with Pyongyang.
Chinese Foreign Ministry spokesman Hong Lei said: 'We regret the casualties and property losses, and are concerned about the situation.
"We strongly urge both sides retain calm and restraint and engage in talks as quickly as possible in order to prevent similar incidents from happening again," he added.
Many believe the attack was meant to highlight the military credentials of North Korea's leader-in-waiting - president Kim Jong-Il's little-known, 27-year-old son Kim Jong-Un.
source: http://news.sky.com/
