19:03 GMT The US plans to consult with allies, including Chin,a to develop a "measured and unified" response to the artillery exchange, the US state department says.
"Everybody involved is stunned by North Korea's provocative actions," Mark Toner, a state department spokesman, said.
"We are working again within an established framework with our partners so we have a deliberate approach to this. We're not going to respond willy nilly."
18:36 GMT Mark Lyall Grant, Britain's ambassador to the UN and the current president of the Security Council, reportedly raised  the issue during a closed-door meeting on the Middle East.
However, an unnamed envoy told the Reuters news agency that the British diplomat merely announced that he was in consultations with the other 14 member states on what to do about the Korean incident.
17:40 GMT North Korea's envoy to the UN says the shelling incident should be discussed between the North and South, rather than by the UN Security Council.
17:01 GMT: Ban Ki-moon, the UN secretary-general, condemned said the artillery barrage was one of the most serious incidents since the Korean War ended.
"The secretary-general is deeply concerned by the escalation of tension on the Korean peninsula caused by today's
artillery attack by the Democratic People's Republic of Korea on the Yeongpyeong Island," the UN press office
said in a statement.
"The secretary-general condemns the attack and calls for immediate restraint."
The statement said Ban, a former South Korean foreign minister, insists that any differences between the north and
south "be resolved by peaceful means and dialogue".
It is still not clear whether the Security Council will discuss the matter today.
16:50 GMT The United States said it was too early to consider any military response to North Korea's attack.
"At this point it's premature to say that we're considering any action," Colonel Dave Lapan, a Pentagon spokesman, told reporters.
He said no additional US forces had been deployed to the region as a result of the North Korean artillery barrage.
"We're still monitoring the situation and talking with our allies," Lapan said, adding that Washington was "mindful" of which actions might exacerbate or cool tensions on the peninsula.
16:31 GMT Barack Obama, the US president, will speak to his SOuth Korean counterpart Lee Myung-bak about the incident, Bill Burton, a White House spokesman, said.
Obama believes the North is not living up to its obligations, Burton said.
15:00 GMT The South Korean president has said Seoul will unleash an "enormous retaliation" should North Korea attack again.
Lee Myung-bak said in comments posted on the presidential website that the North's "indiscriminate attack on civilians can never be tolerated".
14:00 GMT Earlier this month Al Jazeera's Empire programme ran a show on the arms race building in the South China Seas. A good background piece for today's developments.
13:55 GMT China has said it agrees with the United States that North Korea's shelling was "very undesirable".
"We both share a view that such conflict is very undesirable, and I expressed to them the desire that restraint be exercised on all sides and I think we agree on that," Stephen Bosworth, the US envoy to North Korea, said.
13:30 GMT South Korea has given further reaction to the attack, saying North Korea's firing of artillery shells was "unforgiveable".
"Indiscriminate attacks on civilians are unpardonable," Lee Myung-bak, the president, said at a military briefing.
13:21 GMT Time for a bit of background on the Koreas. The two sides have technically been at war since 1950, when Kim Il-Sung, the founder of North Korea, invaded the South. Despite a ceasefire in 1953 a peace treaty was never signed, and various military clashes have taken place since.
Some of the most notable include a mission in 1968 by some 31 armed North Korean spies to assassinated the-then South Korean president, which resulted in 28 of them being shot to death. In 1987 a Korean Air flight departing Baghdad, bound for Seoul, exploded in mid-air killing 115 people on board - a North Korean spy was convicted of planting the bomb.
More recently, the two sides engaged in a brief naval fight in November 2009, and in January 2010 the two exchanged fire near the maritime border.
13:17 GMT More reaction from world leaders. This time Japan's most senior government spokesman has said the attack by North Korea was "unforgiveable".
12:42 GMT Global markets have reacted badly to the Korean peninsula crisis, with stocks falling. European shares have hit a three-week low and US stock futures fell 0.7 per cent.
12:15 GMT And here's a selection of what people have been saying online, courtesy of web journalist Andrew Wander:
Andrea Luna, Seoul: the tension is growing in Korea, there is silence in the street. i hear no cars, no motorcycles. silence
Jonwestenberg, Sydney Australia: Political appeasement did NOT work in 1939, it did not work in Bosnia it WILL NOT work w N Korea. This cannot continue...
Barry Barcock,New Zealand  Please,lets be positive and hope this doesn't escalate. There is enough killing going-on on this planet as it is,without another tit-for-tat spat amongst neighbours.
11:40 GMT The latest developments have sparked widespread reaction on the Internet. On social networking site Twitter Korea-related topics are among the top trending, including #prayforkorea #koreapeace #NorthKorean and #Koreas.
11:35 GMT South Korea has said it was conducting regular military drills off the west coast before North Korea started firing dozens of shells. But it said the exercises did not aim to the North.
"We were conducting usual military drills and our test shots were aimed toward the west, not the north," a South Korean
military official said.
11:33 GMT Martin Navias, a defence analyst for the centre for defence studies at Kings College in London told Al Jazeera it was reasonable to assume that North Korea were responsible for escalating the situation.
"The fact remains the North Koreans have demonstrated a pattern of belligerence and it's reasonable to assume that they escalated the situation for whatever reason. It may be be linked to the change in leadership that's planned there ... or to pressure that the North Koreans may be attempting to bring in relation to the six-party talks.
He added that these "tit for tat" attacks could result in war.
"Firing artillery shells is extremely dangerous. If they wish to escalate then this has enormous potential for destabilising the peninsula and beyond," he said.
11:19 GMT: The European Union has now come out against the attack. Catherine Ashton, the bloc's high representative for foreign affairs and security policy, urged North Korea to refrain from actions that could escalate tensions
11:04GMT: North Korea has blamed the South for starting the firing. But it appears South Korea is unlikely to escalate the situation, as Professor Lee Chung Min, the South Korean ambassador for international security told Al Jazeera.
"This was the first time in many decades, in fact the first time since of the end of the Korean war, when North Korea artillery directly attacked a South Korean civilian target in our own territory.
"So by hitting this particular island this was a premeditated, surgical attack on South Korean sovereignty.
"Having said that if the North Koreans continue with the attacks we will respond militarily in kind. But we do not want to raise the bar so significantly that there will be a an outbreak of a major conflict," he said.
10:40 GMT Aidan Foster-Carter, an expert on North Korea at the University of Leeds, told Al Jazeera online that the attack was "meant to unsettle us".
"North Korea for such a long time has traded on being unpredictable, but it doesn't normally place the stakes as high as this.
He said the attack comes days after North Korea claimed to have a new uranium enrichment facility and as Kim Jong-il prepares his youngest son as hs successor.
"The question of who fired on whose orders is not an idle one. It's possible this was done on behalf the successor of Kim Jong-il," he said.
10:30 GMT Governments around the world are moving to condemn the attack on South Korea. William Hague, Britain's foreign secretary, said "such provoked attacks will only lead to further tensions on the Korean peninsula".
Guido Westerwelle, Germany's foreign minister said he was "worried about the latest development".
"The fact that violence was used is something which is worrying us in Europe," he said. "We appeal to all participants to contain themselves and that rationality and reconciliation prevail."
10:15 GMT In Japan the government has been told to prepare for any eventuality.
"I ordered (ministers) to make preparations so that we can react firmly, should any unexpected event occur," Naoto Kan, the prime minister, said.
10:10GMT Sergei Lavrov, Russia's foreign minister, says that increased tension on the Korean peninsula represents "colossal danger". His comments come after a ministry offical said the attack on the South Korean island was unacceptable and called on both sides to show restraint.
"We think the use of force on the Korean peninsula, and in international relations in general, is a path that is absolutely unacceptable," the official told reporters, adding the conflict must be solved by diplomatic means.
0950 GMT South Korea's defence ministry says North Korea's firing of artillery shells was a clear violation of an armistice between the two countries, and said Pyongyang had planned the shelling intentionally. "This is an intentional and planned attack... and it is clearly in violation of the armistice," Lee Hong-ki, a South Korean defence ministry official said.
Two South Korean marines are reported to have died in the shelling of  the island of Yeonpyeong. They are believed to be among four seriously injured when dozens of artillery shells were fired by North Korea.
South Korea's Joint Chiefs of Staff said. Meanwhile, the Unification Ministry of South Korea announced that the government would indefinitely postpone Red Cross talks with North Korea, slated for Thursday.
0940 GMT The White House condemns the artillery attack and demands the action cease.
"The United States strongly condemns this attack and calls on North Korea to halt its belligerent action," the White House said in a statement.
-- South Korea warned North Korea it  would "sternly retaliate" for any further provocations.
"Our military... will sternly retaliate against any further  provocations," a presidential statement said. "North Korea's shelling of Yeonpyeong island constitutes a clear  armed provocation. Furthermore, its reckless shelling of civilian  targets is unpardonable. "North Korean authorities must take responsibility."