The U.S. and South Korea launched a four-day series of military exercises Sunday as China called for emergency meetings amid increasing tensions between the two Koreas.

As the nuclear-powered USS George Washington and a South Korean destroyer made their way into the Yellow Sea for the planned war games, China's top nuclear envoy, Wu Dawei, said talks should convene early next month among regional powers that have previously been involved in nuclear disarmament discussions.

Officials in South Korea said Wu's proposal should be "reviewed very carefully," particularly in the wake of North Korea's announcement that it has a new uranium-enrichment facility.

The talks would aim to defuse growing tensions between the two Koreas that worsened last Tuesday, when North Korean troops bombarded the South Korean island of Yeonpyeong with artillery fire, killing two marines and two civilians and wounding at least 18 others.

North Korea blamed the barrage on South Korea for engaging in artillery drills near the two countries' sea border, and threatened "merciless" retaliation if the war games stray too close to its border.

CTV's Janis Mackey Frayer said tensions were high on Yeonpyeong Island this week, culminating Sunday in a series of alarms and loudspeaker announcements that sent residents and visiting journalists scrambling into the local village's bomb shelters.

"There was a lot of confusion and a lot of rumours that were happening in that time," Mackey Frayer told CTV News Channel in a telephone interview from South Korea. "The South Korean media was speculating that there was going to be an attack, they were saying that Kim Jong Il or Kim Jong Un were expected to fire a missile themselves. There were a lot of stories that were percolating in the shelters, feeding a lot of the anxiety."

The alarms were sparked by a new round of artillery fire from North Korea, seemingly in protest against the South's war games with the U.S. None of the rounds landed on the island during the ordeal, which lasted about 40 minutes, Mackey Frayer said.

But afterward, the South Korean defence ministry asked journalists to leave the island.

The United States has more than 28,000 soldiers in South Korea, and has said that the military exercises were planned well before last Tuesday's attack by North Korea.

Cmdr. Jeff Davis, a spokesperson for the 7th Fleet in Japan, said the war games will not include any live-fire drills. On Sunday, dozens of South Korean soldiers could be seen laying an aluminum road on Mallipo Beach, on the country's west coast, ahead of an amphibious landing drill planned for Monday. Military ships could be seen in the waters nearby.

"(The joint military exercise) is a show of force, and it is designed to defer further attacks by North Korea," Mackey Frayer said. "They're also wanting to send a message to China that it needs to do more or do enough to reign in its ally in order to bring down tension along the peninsula."

North Korea continued to denounce the war games Sunday. The National Peace Committee called them a "pretext for aggression and igniting a war at any cost," in a statement issued by the official Korean Central News Agency.

Chinese officials finally stepped into the fray Sunday. In addition to Wu's call for talks, China sent state councillor Dai Bingguo to Seoul to meet with South Korean President Lee Myung-bak.

Lee asked China to take a "more objective, responsible" approach to brokering peace in the region, but also warned that his country would "strongly" answer any future attacks.

Lee is scheduled to address South Korean residents Monday morning.

With files from The Associated Press