The administration of South Korean President Roh Moo-hyun says it will enforce the United Nations Security Council resolution that imposes sanctions on North Korea.
However, officials in Seoul say the resolution does not affect two of South Korea's major projects in the North.
Seoul has spent billions of dollars on a tourist resort on North Korea's Mount Kumgang and an industrial zone in the North Korean border city of Kaesong. Officials at the Foreign Ministry say neither venture is targeted by the U.N. resolution, which, among other things, bans North Korea from importing or exporting some military hardware.
Peter Beck, Northeast Asia director for the International Crisis Group research organization, says Seoul want to protect its engagement policy with the North.
"There's a sense by the government here that they really don't have any choice - that even if it means taking heat from allies and political opponents, that they don't want to make the crisis any worse."
Opposition politicians have called for Kaesong and Mount Kumgang to be shut down, saying they have helped transfer hundreds of millions of dollars to the North, which may have been diverted into weapons programs.
The United Nations voted Saturday to impose the sanctions after North Korea announced a week ago it had t
ested a nuclear explosive.
For three years, the United States, South Korea, China, Japan and Russia have tried to persuade Pyongyang to comply with its past pledges to not develop nuclear weapons.
The isolated and impoverished North Korea says it needs nuclear weapons because it fears an attack by the United States. Washington denies having any intention of attacking the North.
U.S. Secretary of State Condoleezza Rice heads to Asia this week to discuss implementing the sanctions with North Korea's neighbors. The United States, with support from Japan, has vowed to stop and search North Korean vessels as necessary, as provided for by the resolution.
In addition, Christopher Hill, the top U.S. negotiator on North Korea, arrived in Tokyo Monday for talks on the issue, and will meet with South Korean officials in Seoul later this week.
The Crisis Group's Beck warns ship interdictions will be difficult, especially because the U.N. resolution does not authorize the use of force against North Korea.
"We have to assume that a North Korean ship is not going to be willingly boarded - so it's going to be a very delicate operation."
China has indicated it will not take part in ship interdictions, and South Korea says it cannot afford to help stop North Korean ships, because of its delicate relationship with Pyongyang.
A reminder of that fragile relationship could be heard Monday in the streets of Seoul.
South Korea's Emergency Management System conducted a test of air sirens, which would be sounded in the event of an attack by the North. The tests are scheduled in advance and conducted twice a year.
Fighting in the Korean War was halted in 1953 by a temporary armistice, which remains in effect. Because no treaty was signed, North and South Korea remain technically at war.