South Korean and US troops have gone on higher alert after North Korea said it was scrapping the treaty that halted the Korean War more than 50 years ago.
Seoul's defence ministry said it would increase reconnaissance operations over North Korea.
North Korea recently tested a nuclear device and several short-range missiles but no significant troop movements within the country have been reported.
The UN Security Council is discussing a response to North Korea's nuclear test.
See comparison of North and South's military power"Watchcon II took effect as of 0715 [2215 GMT]," said South Korean defence ministry spokesman Won Tae-Jae, adding that the five-stage combat alert level was at its second-highest level.
"Surveillance over the North will be stepped up, with more aircraft and personnel mobilised," he said.
The US is to bolster its intelligence support.
Factfile: Underground testing
The UN Command said the armistice - which has preserved a tense peace for more than five decades on the Korean peninsula - remained in force.
The UN Command is a multi-national military force headed by the US which fought for the South in the 1950-53 Korean war, and still stations 28,500 troops in the South.
Pyongyang has blamed its decision on South Korea's decision to join a US-led initiative to search ships for nuclear weapons, calling it a "declaration of war".
"Any hostile act against our peaceful vessels, including search and seizure, will be considered an unpardonable infringement on our sovereignty," said a spokesman for the North's army.
"We will immediately respond with a powerful military strike."
Punitive measures
This latest crisis comes just days after North Korea carried out an underground nuclear test, followed by the launch of several short-range missiles into the Sea of Japan.
ESCALATING TENSIONSNo other significant troop movements within the country have been reported, but analysts have warned of a further increase in military tension, including the possibility of a naval clash along the sea border between the two Koreas.
The UN Security Council's five permanent members - plus Japan and South Korea - are working on a strong resolution condemning North Korea's actions, including possible punitive measures.
Washington has reaffirmed US commitments to its allies Japan and South Korea while accusing Pyongyang of "sabre-rattling and bluster and threats".
US Secretary of State Hillary Clinton condemned the North's violation of Security Council resolutions, but also held out hope that North Korea would return to six-nation disarmament talks.
Moscow said that while world powers should be firm, they should not inflame tensions, adding that the stand-off could only be solved through talks.
Heightened tensions
Last month North Korea launched a long-range rocket over Japanese airspace, angering the international community.
FROM BBC WORLD SERVICEPyongyang said the rocket had carried a peaceful communications satellite, but several nations viewed it as cover for a missile test.
The UN Security Council condemned the launch and, in retaliation, North Korea announced it was quitting long-running six-nation negotiations on its nuclear disarmament.
It ejected all international monitors and said it would reopen its main nuclear plant at Yongbyon, which was closed in July 2007 as part of a disarmament deal.
When North Korea agreed in February 2007 to abandon its nuclear ambitions in return for aid and diplomatic concessions, there was real hope of reaching a settlement.
But the negotiations stalled as it accused its negotiating partners - the US, South Korea, Japan, China and Russia - of failing to meet agreed obligations.
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