The move followed the North's recent long-range rocket launch and apparent nuclear test
The president of South Korea has threatened tough action against the North to help it come to the "bone-numbing realisation" that nuclear activity will only bring about its downfall.
Park Geun-hye pledged further "strong" measures after suspending operations at a jointly-run industrial park.
The move followed the North's recent long-range rocket launch and apparent nuclear test.
Those actions and threats to carry out more "extreme acts of provocation" show North Korea has no interest in peace, she said in a speech to parliament.
She told members: "The suspension of the Kaesong industrial zone is only the start of a series of actions we will be taking together with the international community.
"The government will take strong and effective measures for the North to come to the bone-numbing realisation that nuclear development will not help its survival but rather it will only speed up the collapse of the regime."
Seoul and the United States say the rocket launch was in fact a test of a long-range missile that violated UN Security Council resolutions.
The North denied this, however, insisting it was part of its scientific programme designed to get satellites into space.
Washington and Seoul are seeking support from China, North Korea's main ally, for tougher sanctions against the regime over its recent activities.
South Korea is on heightened alert for any kind of "extreme actions" Pyongyang might take, Ms Park said.
She also warned against using the increased tension for political purposes, which she said "would be exactly what the North would want to see".