South Korea’s government has put the country on “high alert” after defying North Korean threats by conducting live firing drills from the disputed island at the centre of rising tensions on the Korean peninsula.

In a rare display of restraint, North Korea responded by saying that it would not retaliate for the military exercises. “We felt it was not worth reacting one-by-one to military provocations,” the official KCNA news agency quoted the North’s Korean People’s Army Supreme Command as saying.

When Seoul last carried out such drills Pyongyang reacted by shelling Yeonpyeong, the disputed island, killing four people.

Monday’s hour-long exercises came amid United Nations divisions over how to resolve the crisis. Russia and China had both urged Seoul to abandon or postpone the drill as part of efforts to reduce tensions in the area. The exercises started shortly after a meeting of the UN Security Council broke up without agreement on a joint statement intended to cool the escalating peninsula tensions.

The failure was blamed on ­disagreement over whether directly to condemn North Korea for the crisis, with Russia and China leading calls for the statement to be neutral.

Before the drills began, Seoul’s defence ministry put its air force on alert with the Yonhap News agency reporting that two destroyers had been deployed in forward positions in the Yellow Sea. Civilians on Yeonpyeong and other frontline islands were told to take shelter.

Kim Kwang-jin, the South’s defence minister, ordered his staff to seek “all possible means” to deal with any response from Pyongyang.

Following the drills, China called for calm on the Korean peninsula, saying that no one had a right to “preach or promote conflict”.

South Korea went ahead with the drills after facing a barrage of domestic criticism for what some saw as its weak response to last month’s attack. But analysts warned that the North’s muted response on Monday did not mean an end to tensions.

“North Korea is unlikely to strike back right away but it will decide the level of retaliation, watching the overall diplomatic developments,” said Kim Yong-hyun, professor of North Korean studies at Dongguk University in Seoul.

The tension hit financial markets with Seoul’s benchmark index off nearly 1 per cent and the won falling to a one-month low against the dollar.

Separately, CNN reported that Pyongyang had told Bill Richardson, the governor of New Mexico who is in North Korea, that it was willing to allow UN inspectors to return to monitor a nuclear plant.

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