North Korea says it will not respond to yesterday's South Korean live fire artillery exercises.

The South has completed the artillery drill on the border island of Yeonpyeong, which was shelled last month by North Korea.

Yeonpyeong residents were ordered into air-raid shelters as Seoul scrambled fighter planes and put ground troops on high alert, fearing Pyongyang would launch strikes like those last month which killed four people on the island.

But North Korea's military later released a statement, saying it did not feel the need to retaliate.

It said Seoul was using a "cunning scenario" to try to tempt it into a military response, accusing South Korea and the United States of acting like "warmongers".

Pyongyang says the live fire exercise was nothing more than the "childish play of cowards".

Meanwhile, media reports suggest Pyongyang is set to allow UN nuclear inspectors back into the country to monitor North Korea's main uranium enrichment site.

China has called for "maximum restraint" on the Korean peninsula, saying no-one had a right to "preach or promote conflict".

Beijing, North Korea's main ally, had earlier warned any bloodshed on the Korean peninsula would be a "national tragedy", as tensions soared in the build-up to the drill.

"China always maintains that peace and stability must be maintained on the peninsula. This is a goal we have been working very hard to achieve all along," vice foreign minister Cui Tiankai told reporters.

"No-one has any right to preach or promote conflict or war, and no-one has any right to cause bloodshed between the peoples in the North and South of the peninsula," he said when asked to comment on the drill carried out by Seoul.

In his comments, delivered at a press conference following a meeting with Australian officials on human rights issues, Mr Cui neither directly criticised the South nor warned Beijing's ally, Pyongyang against retaliation.

The Chinese official said dialogue was the only way forward to resolve the crisis sparked by the North's November 23 shelling of Yeonpyeong island, which left four people dead including two civilians.

"In recent weeks and months, we have had quite intensive diplomacy with the relevant parties related to the Korean peninsula," Mr Cui said.

"Whatever the differences and disputes relevant parties may have, they can only be addressed through dialogue and negotiation rather than by conflict or war."

In a subsequent statement, Chinese foreign ministry spokeswoman Jiang Yu called on all parties concerned to exercise "maximum restraint" and take a "responsible attitude" in order to keep the situation from escalating further.

- ABC/AFP