General Yoo Nak-Joon, the commander of the Marine Corps, grimly pledged to "repay North Korea a hundred- and thousand-fold" for the deaths of the young servicemen, whose tearful funeral ceremony was televised nationwide.
"We'll engrave this outrage deep into our bones," he said.
The prime minister, soldiers and crying relatives paid their last respects to Sergeant Suh Jung-Woo, 22, and Private Moon Kwang-Wook, 20, who died on Tuesday along with two civilians on the frontline island of Yeonpyeong.
Mourners filed past their portraits to lay flowers and light incense at an altar decorated with white chrysanthemums, before three rifle shots echoed for their final salute and their bodies were buried at a national cemetery.
Tuesday's attack -- the first shelling of civilians since the 1950-53 Korean war -- has deeply shaken South Korea, strained nerves across the region and highlighted divisions between the United States and China.
Pyongyang ramped up the tension with threats of more strikes if it feels provoked by a major US-South Korean naval exercise from Sunday, which it has said will bring the peninsula closer to "the brink of war".
President Lee Myung-bak on Saturday held a security meeting on how to counter another possible North Korean attack.
Lee warned that "there is a possibility that North Korea might commit wayward acts during the exercise," according to Hong Sang-Pyo, senior secretary for public affairs at the presidential Blue House.
The newly named defence minister, Kim Kwan-Jin, earlier pledged a tougher response in case of another North Korean attack, vowing that "we need to hit back multiple times as hard", a news report said.
Kim, 61, a former head of the Joint Chiefs of Staff, replaced Kim Tae-Young, who resigned over criticism that South Korea was too soft in its response to the attack, firing artillery but not launching air strikes.
In Seoul, 1,000 South Korean marine veterans held a rally, burning the North Korean flag and portraits of its leader Kim Jong-Il and his son, the 27-year-old heir-apparent Kim Jong-Un.
One of demonstrators, Lee Kwang-Sun, said the elderly men in camouflage uniforms were prepared to return to active duty, telling AFP: "We are ready to rush to the frontline if we are asked to do so."
Many newspaper editorials demanded an urgent military overhaul.
The Korea JoongAng Daily charged that "the military's credibility and potency has become highly questionable as it scurries and scrambles in the face of bolder provocation from the North".
The Korea Herald said that "the South should secure overwhelming firepower and allow fighter jets to launch counter-attacks against the North's attacks".
The USS George Washington, a nuclear powered carrier, and its battle group were heading for waters west of the peninsula for four days of drills in a show of naval firepower meant as a deterrent to the North.
Washington has stressed that the manoeuvre is "defensive in nature", was planned before North Korea's attack, and is not aimed against China.
China -- which has resisted taking sides in the worst flare-up in decades between the Koreas -- was more outspoken in its opposition to the US-South Korean drills.
"We hold a consistent and clear-cut stance on the issue," China's foreign ministry spokesman Hong Lei said in a statement Friday.
"We oppose any party to take any military actions in our exclusive economic zone without permission," it said, referring to the sea area that stretches 200 nautical miles (370 kilometres) from a country's shores.
North Korea, in the latest of a series of threats, also decried the exercise, with a state body warning on its website that "this is another intolerable military provocation against us".
"It is our military and people's revolutionary mettle and mode of response to counter intruders with merciless strikes," said the official website of the Committee for the Peaceful Reunification of Korea.
"Our military still keeps the barrels of artillery open and if invaders dare intrude into our territorial land, air and waters, we would take advantage of this opportunity to turn the heartland of enemies into a sea of fire."