"I am very worried by the North Korean artillery fire on South Korea. This new military provocation threatens peace in the region," Guido Westerwelle said in a statement.
"I hope in this tense situation that all parties will act in a cool-headed manner and I welcome the efforts of South Korean President Lee (Myung-Bak) to de-escalate the situation.
"The (German) government assures the South Korean people and its government of our support and sympathy in this difficult time," he said.
North Korea fired dozens of artillery shells onto the border island of Yeonpyeong on Tuesday, killing two marines and injuring 18 soldiers or civilians.
In what appeared to be one of the most serious border incidents since the 1950-53 war, South Korean troops fired back with cannon, the government convened in an underground war room and "multiple" air force jets scrambled.
North Korea said however that South Korea had fired first. The disputed sea border just north of the island was the scene of deadly naval clashes in 1999, 2002 and last November.