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North Korea refuses to recognize the so-called Northern Limit Line that has been the naval border since the end of the Korean civil war in 1953.
South Korea's military on Thursday seized a North Korean fishing boat that it said had crossed a disputed maritime border after ignoring warnings to retreat amid growing tension between the two sides.
The incident comes as the North faces renewed pressure from the international community after it fired two mid-range missiles on Wednesday just as the leaders of South Korea, Japan and the United States pledged to curb its nuclear arms ambitions.
In what appeared to be a show of defiance, North Korea fired two medium-range Rodong ballistic missiles into the sea, both Japan and South Korea said.
The UN Security Council will hold closed-door consultations on Thursday to discuss a possible condemnation of North Korea's action, UN diplomats said.
North Korea refuses to recognize the so-called Northern Limit Line that has been the naval border since the end of the Korean civil war in 1953. The two sides have been technically at war ever since, as the fighting ended with a mere truce, not a treaty.
North Korean navy vessels crossed the line in 1999 and 2002 that led to clashes that killed an unidentified number of sailors on both sides.
Three people aboard the vessel that crossed the naval border were under South Korean custody on Thursday, an official at the office of South Korea's Joint Chief's of Staff said.
"If North Korea tries provocation with the excuse that we seized the vessel that crossed the line, we'll be sure to come back with punishment pretty decisively," the official said, asking not to be identified.
North Korea threatened nuclear strikes against the South and the United States last year after the United Nations tightened sanctions against it for conducting its third nuclear test.
On Wednesday, US President Barack Obama said North Korea's provocations would be met by a united response, after meeting South Korean President Park Geun-hye and Japanese Prime Minister Shinzo Abe at a security summit in The Hague.
A South Korean navy ship was sunk four years ago near the area of the latest infringement. An international team of investigators said it was torpedoed by the North, but Pyongyang denies the charge.
(Reporting by Ju-Min Park and Jack Kim; Editing by Nick Macfie)