South Korean President Lee Myung-Bak held an emergency security meeting on Thursday that warned North Korea of "serious consequences" if it went through with an expected nuclear test.
The meeting at the presidential Blue House included the defence minister, National Intelligence Service chief and the national security advisor.
A statement issued afterwards said Lee had insisted on a strengthened defence posture, given Pyongyang's apparent desire to take advantage of the ongoing leadership transition in the South.
Lee will be formally replaced as president by the newly elected Park Geun-Hye on February 25.
"The government urges North Korea to immediately stop all provocative statements and actions and abide by international obligations including UN Security Council resolutions," the statement said.
"If the North miscalculates and commits a provocative act again, it would face various serious consequences", it added.
North Korea has threatened to carry out its third nuclear test in response to UN sanctions imposed on Pyongyang for its long-range rocket launch in December.
It has also warned of "physical counter-measures" against the South if Seoul "directly participates" in the UN sanctions.
North Korea said its rocket launch was a scientific mission aimed at placing a satellite in orbit, but most of the world saw it as a disguised ballistic missile test. South Korea staged a satellite launch on Wednesday.
After North Korea's rocket launch, the UN Security Council adopted a resolution, expanding sanctions imposed on the country after its nuclear tests in 2006 and 2009.