Pyongyang has denied involvement in the sinking of a South Korean ship, and warned of 'full-scale war' if new sanctions are imposed, the Yonhap news agency says.
The US has strongly condemned the torpedoing of the ship as 'an act of aggression'.
South Korean President Lee Myung-bak has vowed to take "stern action" against North Korea over the sinking of a South Korean warship.
The presidential Blue House said on Thursday that Lee made the pledge during a phone call with Australian Prime Minister Kevin Rudd.
"Resolute countermeasures will be taken against North Korea," Lee said.
International cooperation urged
South Korea, through strong international cooperation, "should make North Korea admit its wrongdoing and return as a responsible member of the international community", he added.
A torpedo fired by a North Korean submarine sank a South Korean warship with the loss of 46 lives, investigators said.
"The evidence points overwhelmingly to the conclusion that the torpedo was fired by a North Korean submarine," the multinational team said in its report on the March 26 sinking near the disputed inter-Korean border.
"There is no other plausible explanation."
Torpedo parts salvaged from the Yellow Sea "perfectly match" a type of torpedo which North Korea has offered for export, the report said.
A marking in Korea's Hangeul script was found on one recovered section, and matched markings on a stray North Korean torpedo recovered by the South seven years ago.
The communist North overnight again denied involvement in the attack, the worst cross-border provocation since the downing of a South Korean airliner in 1987 with the loss of 115 lives.
It said the South was using the "fiction" as an excuse to push cross-border relations towards catastrophe.
Team of foreign investigators
But the investigators, including experts from the United States, Australia, Britain and Sweden, laid out apparently damning evidence of its involvement.
The ship was split apart and sank due to a shockwave and bubble effect produced by the underwater explosion of a 250kg homing North Korean torpedo, the report said.
It said torpedo parts recovered by a dredging ship on May 15th -- including the propellers, propulsion motor and a steering section -- "perfectly match the schematics of the CHT-02D torpedo included in introductory brochures provided to foreign countries by North Korea for export purposes".
Pyongyang has 'dozens of submarines'
The report said the North has about 70 submarines and torpedoes of various capabilities.
It said the attack was likely carried out by a small submarine.
"We confirmed that a few small submarines and a mother ship supporting them left a North Korean naval base in the West (Yellow) Sea 2-3 days prior to the attack and returned to port 2-3 days after the attack."
No submarines from other countries were in the vicinity at the time, it said.
Five days of mourning
The sinking caused outrage in South Korea, which decreed five days of national mourning for the victims. But Seoul is believed to have ruled out a military counter-strike for fear of igniting an all-out war.
It is likely to ask the Security Council to slap new sanctions on the North, in addition to those imposed to curb its missile and nuclear programmes.
North and South Korea have remained technically at war since their 1950-53 conflict ended only in an armistice. The land border is closely guarded.
The North refuses to accept the borderline drawn in the Yellow Sea, where the Cheonan went down. The area was the scene of deadly clashes in 1999 and 2002 and of a firefight last November which left a North Korean boat in flames.
Some analysts suggest the attack on the Cheonan was revenge for the November clash.