"I would consider that North Korea is crossing a red line if it launches an intercontinental ballistic missile again and weaponises it by putting a nuclear warhead on top of the missile," South Korean President Moon Jae-in said at a news conference marking his first 100 days in office.
Moon has repeatedly urged North Korea not to "cross the red line" but had not previously elaborated what that would constitute.
US President Trump had promised to seek negotiations and approval from South Korea before taking any options regarding North Korea, Moon also said.
The United States and South Korea remain technically still at war with North Korea after the 1950-53 Korean conflict ended with a truce, not a peace treaty.
Washington has warned it is ready to use force if needed to stop North Korea's ballistic missile and nuclear programmes but that it prefers global diplomatic action.
'No military solution'
US Vice President Mike Pence told reporters in Chile on Wednesday that "all options" remained on the table with regards to North Korea, and he called on Latin American nations to break ties with Pyongyang.
However, White House chief strategist Steve Bannon said there was "no military solution" to North Korea's nuclear threats because of Pyongyang's massed artillery targeting the South Korean capital.
"Until somebody solves the part of the equation that shows me that 10 million people in Seoul don't die in the first 30 minutes from conventional weapons, I don't know what you're talking about, there's no military solution here, they got us," Bannon told The American Prospect.
China, North Korea's main ally and trading partner, has repeatedly urged Pyongyang to halt its weapons programme and at the same time urged South Korea and the United States to stop military drills in order to lower tensions.
Bannon said he was pushing the US administration to take a harder line on China trade and not put complaints against its trade practices in the backseat in the hope that Beijing would help restrain leader Kim Jong Un.
"To me, the economic war with China is everything. And we have to be maniacally focused on that," The American Prospect quoted Bannon as saying.
China urges talks
Fan Changlong, a vice chairman of China's powerful Central Military Commission, told Joseph Dunford, Chairman of the US Joint Chiefs of Staff, that China believes the only effective way to resolve the North Korean issue is through talks.
"China believes that dialogue and consultations are the only effective avenue to resolve the peninsula issue, and that military means cannot become an option," China's Defence Ministry cited Fan as saying.
Dunford told reporters in Beijing that a peaceful option was the preferred solution but nobody thought economic pressure alone can result in denuclearisation.
Dialling back military exercises was not currently on the negotiating table with North Korea, Dunford said.
North Korea sees joint South Korea-US military drills as a preparation for war. The latest exercise is scheduled to start on August 21, involving tens of thousands of US and South Korean troops.
In the past, North Korea has fired missiles and taken other steps in response to the war games.
North Korean media reported on Tuesday that Kim had delayed the decision on firing four missiles towards Guam, a US territory home to a vital air base and Navy facility, while he waited to see what the United States did next.
"Kim Jong Un of North Korea made a very wise and well reasoned decision," Trump wrote on Twitter on Wednesday. "The alternative would have been both catastrophic and unacceptable!"
Trump's National Security Adviser H R McMaster met Japan's defence and foreign ministers in Washington on Wednesday to discuss the importance of deterring North Korea's provocations and Tokyo's ballistic missile defences, according to the Japanese government.