North Korea suspends works at Kaesong industrial zone
North Korea has announced it is withdrawing all its workers from the joint-Korean Kaesong industrial zone and suspending operations there.
The move follows weeks of warlike rhetoric from Pyongyang after it was sanctioned by the UN for carrying out its third nuclear test in February.
Kaesong was established almost a decade ago and had been a symbol of co-operation between the two Koreas.
But a North Korean official said it could now be closed permanently.
In a statement, South Korea's Unification Ministry said the decision "cannot be justified in any way and North Korea will be held responsible for all the consequences".
The complex, just over the border in the North, employs more than 50,000 North Korean workers but is funded and managed by South Korean firms.
Pyongyang has already banned South Koreans from entering, but during a visit to the site, Kim Yang-gon, secretary of the party's Central Committee, said the North would now "temporarily suspend the operations in the zone and examine the issue of whether it will allow its existence or close it".
The North's KCNA news agency quoted him as saying that South Korea and the US "insult the country's dignity and make the zone a starting point of war".
"How the situation will develop in the days ahead will entirely depend on the attitude of the South Korean authorities," Mr Kim said.
The statement made no reference to the nearly 500 South Koreans who are in Kaesong as managers.
One South Korean told the Associated Press he had heard nothing about the order from the North Korean government.
"North Korean workers left work at six o'clock today as they usually do. We'll know tomorrow whether they will come to work,'' he said.
Earlier, South Korean officials played down reports that the North could be about to carry out a nuclear test.
A defence ministry spokesman said the widely reported activity detected at the Punggye-ri underground test site appeared to be routine and that there was "no indication that a nuclear test is imminent".
UN Secretary General Ban Ki-moon said such a nuclear test would be a "provocative measure", and warned that North Korea cannot continue "confronting and challenging the authority of the Security Council and directly challenging the whole international community".
Russia and China have called for calm and a return to dialogue.
Speaking during a visit to Germany, Russian President Vladimir Putin said that as a neighbour of North Korea his country was "worried about the escalation" of tensions.
He warned there was a risk of a conflict on the Korean peninsula which would make the Chernobyl nuclear disaster "seem like a child's fairy tale".
The United Nations imposed tough sanctions on North Korea last month following its third nuclear test.
Pyongyang has responded by issuing almost daily threats to use nuclear weapons and saying it would restart its nuclear reactor.
The North has also shut down an emergency military hotline between Seoul and Pyongyang.
Last week it warned it would not be able to guarantee the safety of foreign embassy staff after 10 April, and that countries should begin evacuating their diplomatic staff.
The BBC's John Sudworth in Seoul says North Korea's state media have been broadcasting a continuing diet of war and retribution with programmes about biochemical war, nuclear war and military preparations dominating the listing.
But some analysts have suggested that the rhetoric is in large part designed to shore up the standing of a young, inexperienced leader, Kim Jong-un, he adds.
Meanwhile, Japan's defence ministry said the country's armed forces have been ordered to shoot down any North Korean missile headed towards its territory.
Over the weekend, the US cancelled a scheduled test of its Minuteman 3 ballistic missile, citing concerns that it could be misinterpreted by Pyongyang.
On Friday, North Korea warned that it would not be able to guarantee the safety of foreign diplomats in its capital Pyongyang in the event of war. Despite this, no foreign embassies have yet closed or announced plans to withdraw.
Yongbyon nuclear complex
North Korea's nuclear reactor at Yongbyon has long been a source of tension between the two countries and international powers, amid fears it could be used to provide material for weapons. The plant has been mothballed since 2007, but on 2 April Pyongyang said the complex would be reopened.
Kaesong joint industrial zone
North Korea relies on the jointly-run Kaesong Industrial complex as a vital source of hard currency. However on 8 April, it announced that all 50,000 workers employed there would be withdrawn, throwing the future of the site into question
P'unggye-Ri nuclear test site
North Korea has detonated three nuclear devices deep underground at P'unggye-ri since 2006, but is not thought to be able fit an effective warhead to a missile.
Mobile ballistic missiles
South Korea announced last week that the North had moved ballistic missiles with "considerable range" to its eastern coast. The North is thought to have some 1,000 missiles of various capabilities, although none are currently able to deliver a nuclear weapon.
Seoul in range
The South Korean capital lies within range of North Korea's formidable array of artillery. North Korea has previously threatened to turn the city into a "sea of fire" with a massive barrage. However, some analysts suggest that this threat is overstated, and while devastating, such an attack would be quickly neutralised by any South Korean / US-backed response.