Two South Korean civilians died in attack by North
The bodies of two civilians have been found on the South Korean island of Yeonpyeong, which was shelled in Tuesday's attack by the North.
Two South Korean marines also died, and many were injured when dozens of artillery shells hit the island - most of them striking a military base.
UN Secretary General Ban Ki-moon called it one of the "gravest incidents" since the Korean War.
The US president has pledged to stand shoulder to shoulder with South Korea.
The burnt bodies of two men in their 60s were found on Wednesday on the island, which lies near the disputed inter-Korean Yellow Sea border. According to the South Korean Coast Guard, they were believed to be construction workers.
At the scene
They waited on the quayside for the coastguard ship carrying their loved ones - the friends and relatives of the residents of Yeonpyeong island, which was targeted by North Korean artillery. As the vessel docked, and the passengers - many of them elderly - filed down the gangplank, the well-wishers pressed forward. There were smiles and some tears.
Some of the islanders looked bewildered. They were surrounded by reporters, all with one question - what had it been like under fire? "We sheltered in a cave, there was no electricity," one tiny old woman explained. An elderly man said: "It was chaos - things were falling around me everywhere."
The coastguard took about 500 people off Yeonpyeong. They were angry that some homes had been reduced to smouldering ruins. Those who lived on this island knew it was not a safe place to live, as it lies too close to South and North Korea's disputed maritime border for that. But it was clear how traumatised they were. They had not expected they would be targeted by Pyongyang in this way.
The latest TV pictures of the island show neighbourhoods reduced to rubble with shops and homes burnt and destroyed.
At least 18 people were injured in the attack. Hundreds fled the island, taking ferries to the mainland where they described what happened.
"I heard the sound of artillery, and I felt that something was flying over my head," said Lim Jung-eun, a 36-year-old housewife who fled the island with her three children. "Then the mountain caught on fire."
South Korea returned fire after the attack, said it was suspending flood aid to the North and threatened missile strikes if there were "further provocations".
In response, North Korea repeated claims that Seoul provoked the artillery attack by firing into the North's territory.
In a statement after the exchange of fire, the North accused Seoul of driving the peninsula to the "brink of war" with "reckless military provocation" and by postponing humanitarian aid, according to the North's official KCNA news agency.
In a telephone call, US President Barack Obama assured the South Korean president of his country's firm and full commitment to the defence of an ally.
The two countries are due to hold joint military drills beginning on Sunday.
A US aircraft carrier with 75 warplanes left a naval base south of Tokyo on Wednesday, bound for Korean waters.
NORTH KOREAN ATTACKS
- Jan 1967 - attacks South Korean warship near border, killing 39 sailors
- Jan 1968 - commandos storm presidential palace in Seoul in a failed attempt to kill President Park Chung-hee
- Jan 1968 - captures USS Pueblo - one crew member dies and 82 held hostage for 11 months
- Dec 1969 - hijacks South Korean airliner taking dozens of passengers hostage
- Oct 1983 - bombs hotel in Rangoon, Burma, in failed attempt to kill South Korean President Chun Doo-hwan - 21 people die
- Nov 1987 - bombs South Korean airliner, killing 115
- Sept 1996 - sub carrying 26 troops disabled off South - some land in South sparking deadly manhunt
- Mar 2010 - torpedoes Cheonan warship, 46 sailors killed. N Korea denies responsibility
The nuclear-powered USS George Washington has a crew of more than 6,000 while the US has a total of some 28,000 troops stationed in the South.
US Forces Korea said the exercise had been organised in advance of Tuesday's attack and was intended to be a deterrent.
"While planned well before yesterday's unprovoked artillery attack, it demonstrates the strength of the South Korea-US alliance and our commitment to regional stability through deterrence," it said in a statement.
But the BBC's John Sudworth, in Seoul, said the deterrent effect may be limited - the carrier was in Korean waters just a few months ago as part of a show of strength that appears to have done little to temper North Korea's actions.
Meanwhile, the Chinese foreign ministry said in its first detailed comments that it took the incident "very seriously", and expressed "pain and regret at the loss of life and property".
"We feel anxious about developments," spokesman Hong Lei said. "China strongly urges both North and South Korea to exercise calm and restraint and as quickly as possible engage in dialogue and contacts."
China - the North's main ally - also opposed "any actions harmful to peace and the stability" of the Korean Peninsula, Mr Hong added.