"The provocation this time can be regarded as an invasion of South Korean territory. In particular, indiscriminate attacks on civilians are a grave matter," a stern-faced Lee said during a visit to the headquarters of the Joint Chiefs of Staff in central Seoul.
Lee's strongly worded comments came after a series of emergency meetings onn Tuesday with senior presidential aides and security-related ministers at the underground bunker of the presidential compound Cheong Wa Dae. Participants included Foreign Minister Kim Sung-hwan, Unification Minister Hyun In-taek, Defense Minister Kim Tae-young, Home Affairs Minister Maeng Hyung-kyu and Won Sei-hoon, chief of the state spy agency.
Earlier in the day, Cheong Wa Dae issued a statement denouncing the North's latest provocation.
"North Korea will have to bear full responsibility" for all consequences, Hong Sang-pyo, senior secretary for public affairs at the presidential office Cheong Wa Dae, said. He also warned that the South will "resolutely retaliate" if the North makes any further provocations.
Hong said the government was trying to figure out the North's intentions, adding it regards the attack as a "localized situation," rather than a prelude to a full-scale war.
"We have informed our allies and neighboring countries of the current situation through diplomatic channels," he said.
He dismissed rumors of North Korean leader Kim Jong-il's death as groundless. "We concluded that it is not a meaningful rumor or intelligence," he said.
In a separate press briefing, Cheong Wa Dae spokeswoman Kim Hee-jung quoted the president as telling his military to strike North Korea's missile base around its coastline artillery positions if necessary.
"President Lee instructed (the military) to strike North Korea's missile base near coastline artillery positions if necessary... if there is any indication of further provocation," she said.
The spokeswoman also said that the North's provocation might have come in retaliation for one of the South's annual military exercises.
"Our Navy was conducting a maritime exercise near the western sea border today. North Korea has sent a letter of protest over the drill. We're examining a possible link between the protest and the artillery attack," said Kim.
Foreign ministry officials said they were in consultations with the United Nations over whether to refer the case to the global organization.
South Korea's rival political parties, meanwhile, canceled a budget committee meeting and agreed on bipartisan support for the government's response to the incident.
"We should deal resolutely with North Korea's premeditated provocation against (the South Korean military's) normal and routine exercise that takes place on a quarterly basis," Ahn Sang-soo, head of the ruling Grand National Party, said.
Sohn Hak-kyu, leader of the main opposition Democratic Party, urged Pyongyang to "immediately stop provocative acts that threaten the security and peace on the Korean Peninsula."
The North fired some 100 coastline artillery rounds across the western sea border onto Yeonpyeong Island Tuesday afternoon, killing two marines and wounding more than a dozen others. Three civilians on the small island, home to more than 1,600 residents, mostly fishermen and their families, and a marine corps base, were also wounded.
The attack set houses and forests on fire on the island that lies just south of the Northern Limit Line, the de-facto maritime border between the two Koreas drawn at the end of their 1950-53 war.
The South Korean military launched an immediate counterattack, firing about 80 K-9 self-propelled artillery shells toward the North's coastal areas. The exchange of fire lasted for about a hour.
Tuesday's attack was the North's most serious provocation since it torpedoed a South Korean warship in March that killed 46 sailors. It marks the first direct artillery attack on South Korean territory since the Korean War ended in an armistice, not a formal peace treaty.
"Reckless attacks on South Korean civilians are not tolerable, especially when South Korea is providing North Korea with humanitarian aid," the president said. "As for such attacks on civilians, a response beyond the rule of engagement is necessary. Our military should show this through action rather than an administrative response" such as statements or talks, he added.
He did not rule out the possibility of follow-up attacks.
"Given that North Korea maintains an offensive posture, I think the Army, the Navy and the Air Force should unite and retaliate against (the North's) provocation with multiple-fold firepower," Lee said. "I think enormous retaliation is going to be necessary to make North Korea incapable of provoking us again."
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