South Korea accused the reclusive North on Thursday 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, 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.