Combative rhetoric between the nations spiked after Pyongyang tested two intercontinental ballistic missiles (ICBM) last month that appeared to bring much of the U.S. within range, sparking an intense warning by President Donald Trump that Washington could rain "fire and fury" on the North.
US and South Korean troops have begun their annual military exercises amid continued angry words from North Korea.
North Korea warned Sunday that the upcoming US-South Korea military exercises are "reckless behavior driving the situation into the uncontrollable phase of a nuclear war".
South Korea's President Moon Jae-in said Monday that North Korea must not use the drills as a pretext to launch fresh provocation, saying the training is held regularly because of repeated provocations by North Korea.
The head of the US military's Pacific Command said on Tuesday it was more important to use diplomacy to counter North Korea's missile threat rather than consider what actions by the reclusive North might trigger a preemptive strike.
And, the tensions were ratcheted up further when President Donald Trump made threats of fire and fury to North Korea.
If North Korea uses the drills this week as a reason to launch missiles around Guam or elsewhere, it could set off a new cycle of escalation.
A report Pyongyang has earned millions of dollars in exports seemed likely, meanwhile, to raise doubts about the impact of sanctions to pressure North Korea into dismantling its nuclear and ballistic missile programmes. -South Korea military exercises demonstrate near the U.S. Embassy in Seoul.
North Korea typically responds to South Korea-US military exercises with weapons tests and aggressive rhetoric.
China's willingness to get tough with North Korea changes the dynamics of the standoff, and makes future negotiations more consequential than past attempts.
China, North Korea's main ally and trading partner, has urged the United States and South Korea to scrap the exercises.
"We call on all countries to redouble their efforts, including through implementation of agreed UN Security Council resolutions, to bring North Korea to its senses and end its reckless and risky threats to the peace of our region and the world", he added. "I want to warn North Korea to do no more unsafe gambling", Moon said.
Pyongyang later said it was holding off firing towards Guam while it waited to see what the United States would do next. About 17,500 United States service members are participating in the exercise this month, down from 25,000 a year ago, according to the Pentagon.
Other South Korean allies are also joining this year, with troops from Australia, Britain, Canada, Colombia, Denmark, the Netherlands, and New Zealand taking part.