| YEONPYEONG, South Korea
YEONPYEONG, South Korea Nov 29 South Korean and U.S. forces pressed on with massive military drills on Monday as regional powers considered a call by China for emergency talks following North Korea's attack on a southern island.
China's proposed emergency consultations come amid global pressure on Beijing to take a more aggressive role in the standoff between the rival Koreas and try to rein in ally Pyongyang using its leverage as its largest source of aid.
Washington and Tokyo were non-committal, saying they would consult with Seoul, which was skeptical of the proposal to sit down with North Korea around a table, effectively rewarding the North for bad behavior.
The reclusive North was previously offered massive aid in return for disarmament pledges that went unmet.
"The six-party talks cannot substitute for action by North Korea to comply with its obligations," a State Department spokesman said, referring to disarmament talks which North Korea abandoned two years ago.
"We have called on China to urge the DPRK (North Korea) to restrain its provocations and responsibly act in the interests of peace and stability."
The call for two Koreas, the United States, Japan, and Russia to meet at a forum hosted by China must be reviewed "very cautiously" in view of North Korea's provocations, Seoul said.
Both Beijing and Pyongyang have been pressing regional powers to return to talks in some form or other for the past few months in a move analysts say is aimed at extracting concessions.
China, which agreed with South Korea that the situation was "worrisome," suggested the emergency talks for December. It did not say whether Pyongyang had agreed to join.
South Korean President Lee Myung-bak was scheduled to address the country at 8 p.m. ET to speak about the country's response to the North's shelling Tuesday of its western island of Yeonpyeong. Four people were killed in the attack.
The island lies 3 km (2 miles) from the disputed sea border.
Yang Moo-jin, of the University of North Korean Studies, said the possibility of immediate additional provocations by the North was low, citing the massive drills by the South and U.S. forces and the start of Chinese diplomacy to defuse tension.
The nuclear-powered USS George Washington, which has 75 warplanes and a crew of more than 6,000, is taking part in around-the-clock drills in waters west of the Korean peninsula but well south of the sea border disputed by the North.
North Korea kept up the tension at the weekend by reportedly moving missiles to frontline areas and warning of retaliation if its territory is violated.
South Korea's financial authorities expect jitters to remain in the markets for some time but without long-lasting effects but were braced for possible volatile swings in capital flows.
The South Korean won posted the largest weekly drop in over five months Friday and was expected to stay weak, analysts and dealers said.
The few remaining residents of Yeonpyeong about 80 km (50 miles) from the mainland South had to evacuate to air raid shelters temporarily Sunday when the military issued a warning for a possible renewed artillery attack by the North.
But in Seoul, life carried on normally for the city's more than 10 million residents, with downtown shopping districts jammed with people despite the freezing temperatures, and cafes decked with Christmas decorations doing brisk business.
"I am worried, but not that worried that I need to stay at home," said Eunhye Kim, an usher showing people from a packed theater. "They don't really want to make war ... there's no gain for either side."
(Writing by Jack Kim; Editing by Nick Macfie and Alex Richardson)