North Korea fired over 200 artillery shells into the sea near two South Korean islands on Friday, Seoul's Defense Ministry said, warning that it would respond.
The firing, near a tense maritime border, caused no civilian or military damage, South Korea's military said.
"This is an act of provocation that escalates tension and threatens peace on the Korean peninsula," Lee Sung-joon, a spokesperson for the South Korean Joint Chiefs of Staff, said.
Residents on the islands of Yeonpyeong and Baengnyeong were ordered to evacuate and seek shelter as South Korea began a naval drill in response. Ferry services in the area were also suspended.
The Defense Ministry would not confirm if the evacuation order was prompted by the North's artillery firing or South Korea's drills.
According to the news agency AFP, authorities told residents of Yeonpyeong, home to just over 2,000 people, that the evacuation order was a "preventative measure."
A local official on the island of Baengnyeong, with a population of 4,900, said that the order was due to the military's planned drills.
In 2010, a North Korean artillery barrage on Yeonpyeong Island killed four people.
China urges restraint
China called for "restraint" from all sides and urged Seoul and Pyongyang to "refrain from taking actions that aggravate tensions, avoid further escalation of the situation, and create conditions for the resumption of meaningful dialogue."
Chinese Foreign Ministry spokesperson Wang Wenbin told reporters that Beijing was "paying close attention to developments and changes to the situation on the Korean Peninsula."
"As a neighbor of the peninsula, China has always advocated maintaining peace and stability on the peninsula and resolving peninsula issues through dialogue and consultation," Wang added.
Tensions between North and South rising
The latest incident intensifies existing tensions between Pyongyang and Seoul.
North Korean leader Kim Jong Un has pushed to increase the country's military arsenal, including nuclear capabilities, warning that a conflict with the South could "break out any time." Last year, Pyongyang test-fired several advanced intercontinental ballistic missiles (ICBMs) and also launched a reconnaissance satellite.
On Friday, North Korean media reported that leader Kim called for the country to be "prepared for a military showdown with the enemy."
South Korea, in the past, has responded to its neighbor's moves with heightened security measures and drills, often with its ally the United States.
Last month, the US deployed a nuclear-powered submarine in South Korea's Busan city and conducted bomber plane drills with Seoul and Tokyo.
North Korea criticized these steps as "intentional nuclear war provocative moves."
