The South Korean government did not jump to conclusions in making this assertion. They went to the time and expense to raise the ship on which 46 sailors where killed and subject it to an intense study. With the help of the United States, Canada, Australia, Brittan and Sweden they determined that the only possible cause for the explosion and sinking was an attack by a heavy torpedo.
The issue is what can be done about this? Obviously the sinking of a national military ship, without warning or provocation is can only be considered a major hostile action. Wars have started from such things. While it is unlikely that the Spanish actually sunk the Maine, the avowed cause of the Spanish American war, no country can take the loss of a war ship to another nation casually.
South Korea is expected to go to the United Nations and ask for further sanctions against the North. Short of actually going to war over this issue, it is about all they are able to do. War with the North is not really an option. The entire Korean peninsula is about the size of Romania. The Demilitarized Zone (DMZ) which separates the two Koreas is only about 30 miles from the South Korean capital Seoul.
On the Northern side there are approximately 6,000 artillery pieces and rocket launchers pointed toward the DMZ. This places the entire South Korean capital in range of these guns and rockets. Any active war would see the almost immediate heavy shelling of Seoul, a city of over 10 million people. That is one fifth of the total South Korean population who would be imperiled.
Further sanctions can be on only limited affect as North Korea has only one major trading partner at this point, China. Up to know China has been very cautious about assigning blame to the North Koreans and it is unclear if they would be willing to further curtail trade with a nuclear armed nation they share a boarder with.
The United States is also in a pickle here. The Obama administration has been courting China aggressively to support a new sanctions regime against Iran. The thinking seems to be that it is more important to prevent the Iranians from developing a nuclear weapon than it is to further punish North Korea for having done it already. This give China enormous leverage to fend off other things the United States wants, like allowing their currency to fluctuate as a major world economic power should.
To make things even more complicate the North Korean regime has stated that if there are sanctions levied against them they are ready to wage an all-out war. It is hard to know how seriously to take such pronouncements. The North Koreans have made a policy of extremely bellicose statements and actions. This is the only way they have been able to garner the attention that they feel they deserve from the world powers which would just as soon ignore the small and very insular nation.
This would be the preferred outcome, but when a nation is threatening the 14th largest economy in the world and a U.S. ally it is hard to just shrug and look away. War would be as disastrous for the North as the South, in terms of destruction, but given its Marxist nature economy and decades of sanctions what the North has to lose compared to the South and the world is much less.
One of the tenets of deterrence is the assumption that your opponent is not insane. They will want to have a country and stay in power, so in general they will not act in ways that make it likely that a super-power will decide to destroy them. It is to be devoutly hoped that the government of Kim Jung-il has these factors in mind.
Still given that the Unites States military is almost completely deployed in Afghanistan and Iraq, there may be a calculation on the part of the North Korean government that they can push in a more aggressive manner without serious consequences. It may be a gamble that will pay off, either in showing that they can act with impunity or in gaining concessions.
Brinksmanship is a dangerous game. It seems the North Koreans feel they have more to gain than lose. Things are likely to be very tense and dangerous in Korea for some time to come. Here is hoping that China finally realizes that they can't have it both ways and puts pressure, economic and social on North Korea. Short of that, things could spiral out of control and into a new war.
The floor is yours.
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