Lettering on the torpedo that "proves" its North Korean origin A North Korean submarine's torpedo sank a South Korean navy ship on 26 March causing the deaths of 46 sailors, an international report has found.
Investigators said they had discovered part of the torpedo on the sea floor and it carried lettering that matched a North Korean design.
Pyongyang rejected the claim as a "fabrication", South Korea's Yonhap agency reported.
It said the North threatened war if sanctions were imposed by the South.
But South Korean President Lee Myung-bak pledged to take "stern action" against the North.
William Hague, UK Foreign SecretaryThe attack demonstrates a total indifference to human life and a blatant disregard of international obligations
The White House described the sinking of the ship as an "act of aggression" by North Korea that challenged peace.
UN Secretary General Ban Ki-moon said the report was "deeply troubling".
Pyongyang said it would send its own inspection team the South to " verify material evidence" behind the accusation.
A North Korean defence spokesman said the country would "respond to reckless countermeasure with an all-out war of justice", the state KCNA news agency reported.
The Cheonan went down near the disputed inter-Korean maritime border, raising tension between the two nations, which technically remain at war.
The shattered wreck of the 1,200-tonne gunboat was later winched to the surface, in two pieces, for examination.
'Perfect match'The investigation was led by experts from the US, Australia, Britain and Sweden.
The Cheonan sinking has increased tensions between the two Koreas It said: "The evidence points overwhelmingly to the conclusion that the torpedo was fired by a North Korean submarine.
"There is no other plausible explanation."
The report said the torpedo parts found "perfectly match" a torpedo type that the North manufactures.
Lettering found on one section matched that on a North Korean torpedo found by the South seven years ago.
There had earlier been a number of explanations suggested for the sinking, including an accidental collision with an unexploded sea mine left over from the Korean War.
Mr Lee's presidential office said he had told Australian Prime Minister Kevin Rudd: "We will be taking firm, responsive measures against the North, and through international cooperation, we have to make the North admit its wrongdoing and come back as a responsible member of the international community."
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Absent from the White House statement is any call for retribution or military response. The US does not want fighting to break out on the Korean peninsula.
The White House, said one expert, will be looking for a response that deters, but does not provoke North Korea.
Sources here say the Obama administration is considering putting North Korea back on the list of countries which sponsor terrorism. That could mean sanctions. North Korea was removed from the list in 2008.
The Secretary of State Hillary Clinton is due to travel to Japan, South Korea and China in the coming days. Managing this smouldering crisis between the two Koreas will no doubt occupy much of her time.
However, the BBC's John Sudworth in Seoul says agreeing an international response will be difficult as the diplomatic options will be limited.
Chinese Vice Foreign Minister Cui Tiankai said on Thursday the sinking of the vessel was "unfortunate" but he would not comment on the international report.
White House spokesman Robert Gibbs said US President Barack Obama had expressed his "deep sympathy" to Mr Lee and the Korean people and that the US "strongly condemned" the action.
"This act of aggression is one more instance of North Korea's unacceptable behavior and defiance of international law," said Mr Gibbs, adding that it "only deepens North Korea's isolation".
Mr Gibbs said the alleged attack was "a challenge to international peace and security and is a violation of the armistice agreement" which ended the Korean war.
But he said it had reinforced the resolve of North Korea's neighbours "to intensify their cooperation to safeguard peace and stability in the region against all provocations".
Japan's Prime Minister Yukio Hatoyama said in a statement that North Korea's action was "unforgivable".
The British embassy in Seoul quoted Foreign Secretary William Hague as saying: "[North Korea's] actions will deepen the international community's mistrust. The attack demonstrates a total indifference to human life and a blatant disregard of international obligations."
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