|Residents of South Korea's Yeonpyeong island were moved to air-raid bunkers in anticipation of Monday's live-fire drill
North Korea has won praise from an American peace enovy after it stepped back from confrontation over what it had called "reckless" military drills by South Korea and reportedly issued a new offer on nuclear inspections.
Bill Richardson, the governor of New Mexico, lauded North Korean officials' "pragmatic attitude" in remarks to the media in Beijing on Tuesday, a day after the South conducted live-fire artillery exercises that shook the island of Yeonpyeong.
On November 23, North Korean artillery shelled Yeonpyeong, located close to the disputed maritime border off the west coast of the Korean peninsula, and killed four people, in the worst attack on South Korean territory since the Korean war ended in 1953.
But the North Korean guns stayed silent on Monday.
Sebastian Walker reports on the move to the bunkers on Yeonpyeong island
"The revolutionary armed forces of the DPRK did not feel any need to retaliate against every despicable military provocation," the official KCNA news agency said, quoting a communiqué from the North's Korean People's Army Supreme Command that called the drills a "childish play with fire".
During his news conference in the Chinese capital, Richardson said North Korean officials appeared to have recognised they had moved "too far down the precipice".
He also said North Korea would allow inspectors from the International Atomic Energy Agency into the country to demonstrate that it is not processing highly enriched uranium.
"Now there has to be deeds and not words," Richardson said.
"But it's up to governments to move forward with the agreements that we've made, and it's time for citizen-diplomats like myself to step aside and let governments move forward."
He said the offer might pave the way for the resumption of six-party talks which also involve the US, Russia, Japan, China and South Korea - although Washington, Seoul and Tokyo have been cool to this idea, reluctant to reward perceived bad behaviour.
"Maybe now is the time for the six-party countries to reach out to North Korea and say, 'OK, let's get down to business'," Richardson said.
North Korea's restrained response brought a measure of relief amid a crisis that has raised fears of war along one of the world's most heavily fortified frontiers.
Earlier, Al Jazeera's Steve Chao, reporting from Incheon, a city on the country's western coast, said that the South Korean government denied that Monday's exercise was a provocation, insisting that it was a routine drill.
But South Korea remained on high alert.
Our correspondent also reported that the North Koreans view the military drills as "proactive", saying: "There is even talk that North Korean jets have been taken out of their hangers - possibly along the west coast in a possible attempt to launch an attack in the event that these drills go forward."
The US said North Korea's decision not to retaliate simply showed it was behaving "the way countries are supposed to act."
The North had threatened it would strike back if its neighbour went ahead with the live-fire exercise.
Monday's artillery exercise came hours after a UN Security Council meeting on the crisis ended in an impasse, with Russia and China resisting an explicit condemnation of North Korea for last month's attack.
Another Security Council meeting planned for Monday was scrapped as diplomats assessed their positions.
Christine Ahn, a policy analyst at the Korea Policy Institute in California, told Al Jazeera that the threat of war with North Korea is very real.
"Unfortunately, that's going to draw in both the United States, and potentially China, into a larger conflict that nobody wants ... I think that the leaders of the United States and South Korea are now playing a very dangerous game that could really escalate into a full-blown war."
Al Jazeera's Melissa Chan, reporting from Beijing, said that the Chinese government there had not yet issued an official response to the South Korean drill.
"But they knew that the South Koreans were planning these military exercises, and the message from China has been, over the past week, 'Everyone stay calm, and let's try to have some restraint over the situation'," she said.
"Certainly the Chinese have been very worried about the escalation of the situation over the past month, and their strategy has really been to push for the status quo, to try to get everyone to talk.
"But, of course, the South Korean-Chinese relationship has been at a pretty good low as a result of all that has happened, with the perception among the South Koreans that the Chinese are not being proactive enough in handling and dealing with the situation."