At the wreath laying ceremony, attended by representatives from Australia and North Korea, Mr Key referred to the sinking of the Korean frigate Cheonan and shelling of South Korean citizens in 2010.
"These incidents remind us that the security challenges of over 60 years on the peninsula remain unresolved. New Zealand continues to stand with South Korea. We encourage dialogue and the resumption of the six party talks as the most appropriate mechanism to resolve the pressing issue of de-nuclearisation of the Korean peninsula."
North Korea has claimed its planned launch is to launch a satellite into space - but many countries have called on it to abandon the plans and US President Barack Obama is due to meet with Chinese President Hu Jintao today. He is expected to encourage the China president to also condemn North Korea's plans and use China's closer relationship with North Korea to apply pressure.
Mr Key said New Zealand continued to provide personnel for monitoring the armistice - an involvement which reflected the strong defence relationship between South Korea and New Zealand.
Next year marks the 60th Anniversary of the end of the Korean War from 1950 to 1953, during which 33 New Zealanders died trying to repel the invasion by North Korea forces. A further 12 died between then and 1957 while policing the Armistice.
Nearly 5000 New Zealanders served in KayForce - the New Zealand contingent acting under UN command and a further 1300 served on naval frigates both during the war and for four years after the 1953 armistice.
He said New Zealanders who had served in the war would be pleased by South Korea as it was today - citing economic advances, a strong democracy and commitment to human rights. He said South Korea was now one of New Zealand's most important partners.