South Korea says North torpedoed ship, tensions rise

SEOUL, (Reuters) – South Korea accused the reclusive  North yesterday of torpedoing one of its warships,  heightening tensions in the region and drawing a warning from  the United States that Pyongyang must face consequences.  

Jittery South Korean financial markets and its currency  fell as Seoul vowed to take “firm” measures against its  neighbor. Pyongyang, furiously denying the charge, warned it  was ready for war if fresh sanctions were imposed.  

The United States, which has some 28,000 troops stationed  in the South following the 1950-53 Korean War, said it stood  ready to help South Korea defend itself against any further  “acts of aggression.” 
 
Amid international condemnation of North Korea, the  impoverished country’s only major ally, China, said it would  make its own assessment of the South Korean investigation.  

Mindful of the tension on the Korean peninsula, U.S.  Defense Secretary Robert Gates and spokesmen for the White  House and the State Department chose their words carefully in  their responses to the report.  
“Clearly this was a serious provocation by North Korea and  there will definitely be consequences because of what North  Korea has done,” said State Department spokesman P.J. Crowley. 
 
Gates said the United States was consulting with South  Korea, which would decide what action to take.  
A report by investigators, including experts from the  United States, Australia, Britain and Sweden, concluded that a  North Korean submarine had fired the torpedo that sank the  Cheonan corvette in March, killing 46 sailors. 
 
The escalating tension weighed on South Korean financial  markets, already worried that investors jumpy about global  financial concerns may pull out their money. 
 
The South Korean won suffered its biggest daily fall  against the dollar in 10 months. Stocks closed at their lowest  level in almost three months.  

U.N. Secretary-General Ban Ki-moon called the result of the  South Korean investigation deeply troubling.  
Envoys at the United Nations suggested the issue could come  before the Security Council early next week if Seoul requested  that the 15-nation body discuss it.  

President Barack Obama’s administration was consulting with  South Korea’s neighbors and the U.N. Security Council on what  to do next, said White House spokesman Robert Gibbs.  

Japan said it would be difficult to resume nuclear  disarmament talks between five regional powers and the North,  and said Washington shared its view that such negotiations,  aimed at aiding Pyongyang in return for a promise to drop its  nuclear arms, were unthinkable.  

Chinese Foreign Ministry spokesman Ma Zhaoxu urged both  sides on the divided Korean peninsula to exercise restraint.