China's foreign minister on Wednesday called for all parties involved in the Korean peninsula crisis to avoid actions that "inflame the situation", state-run Xinhua news agency said.

"The parties concerned should keep calm and exercise restraint, and work to bring the situation back onto the track of dialogue and negotiation," the agency quoted Chinese Foreign Minister Yang Jiechi as saying.

The US and South Korean navies were Wednesday set to wrap up war games meant as a muscular show of force to North Korea, as world powers remained sharply divided on how to deal with the nuclear-armed regime.

Their biggest-ever joint exercise, which has seen jet fighters thunder through the sky above a US carrier battle group, began days after Pyongyang stunned the world with a deadly artillery strike on a South Korean island.

The shelling of Yeonpyeong island, which killed two marines and two civilians, has infuriated South Koreans and sharply raised public support for a far tougher military response if the volatile North should attack again.

The 10 warships and 7,300 crew taking part in the drill were Wednesday carrying out "manoeuvres of fleet protection and logistic sustainment under various scenarios of enemy threat", said South Korea's Joint Chiefs of Staff.

They also said both sides were planning more drills this month or in early 2011, although no details had been finalised yet.

The North has warned that the four-day Yellow Sea exercises brought the Koreas closer to "the brink of war". In the South, Defence Minister Kim Tae-Young said there was "ample possibility" of another North Korean strike.

Beijing has instead proposed that the six parties to long-stalled North Korean denuclearisation talks – the two Koreas, the United States, China, Russia and Japan – hold an emergency meeting on the crisis.

Washington, Seoul and Tokyo have been cool to the proposal or rejected it.

China is blocking attempts to issue a UN Security Council condemnation of North Korea over its attack on the rival South or its new nuclear activities, diplomats said Tuesday.

White House spokesman Robert Gibbs told reporters: "I think the Chinese have a duty and an obligation to greatly press upon the North Koreans that their belligerent behaviour has to come to an end.

Envoys from North Korea and Japan are now visiting Beijing, and China's top foreign policy official Dai Bingguo was expected to head to North Korea this week, according to reports.