In a televised New Year address, Lee Myung-bak opened the door to possible nuclear talks with Pyongyang but warned North Korea that his country would respond sternly to any provocation.
The speech came as Kim Jong-un - the young son of the late Kim Jong-il - took over as supreme commander of the military and ruling party leader after his father's death last month.
The North, which has tested two atomic devices since 2006, vowed in a New Year message that it would bolster its military and defend Jong-un "unto death".
Pyongyang's top decision-making body, the National Defence Commission, warned the world to expect no policy changes under him.
It threatened unspecified retaliation against the South for perceived disrespect during the mourning period for the late leader.
In his speech, Mr Lee said Seoul "will thoroughly maintain national security as long as there is a possibility of provocation by the North. "We will respond strongly if provoked."
Mr Lee also said: "The situation on the Korean peninsula is now entering a new turning point. But there should be a new opportunity amid changes and uncertainty.
"We will be able to open the door for a new era in the Korean peninsula if North Korea shows sincerity."
He added: "We are ready to resolve security concerns on the Korean peninsula and provide assistance to revive North Korea's economy through agreements in the six-nation talks."
In 2010, 50 South Koreans died in attacks blamed on the North, though the Koreas have met in recent months for preliminary nuclear discussions.
North Korea has said it wants to return to long-stalled six-nation talks, which also involve China, the US, Russia and Japan, on halting its nuclear weapons programme in return for aid.
But Washington and Seoul have insisted the North first shows progress on past disarmament commitments.
If North Korea halts its continuing nuclear activities, Mr Lee said in his speech that negotiations could resume.
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