SEOUL - The Prime Minister of South Korea, Mr Lee Soo-sung, yesterday warned that North Korea may strike against a group of isolated islands, and ordered security tightened at airports and diplomatic missions against possible terrorist attack.
In the first sign that escalating tension was eating into business confidence, jittery stock investors dumped shares and sent the market index plunging.
The atmosphere on the Korean peninsula, where two of the world's largest standing armies face each other, is worse than anytime since 1994 when Pyongyang threatened to turn Seoul into a "sea of fire" in a crisis over North Korea's suspected nuclear weapons programme.