Graham, R-S.C., said North Korea's dictator, Kim Jong Un, was acting to destabilize the region and has fundamentally misread how South Korea and the United States will respond if any real military action is taken.
"If there were a South Korean naval vessel sunk this year, any time soon, or shelling of a South Korean island by North Korea, I think the new president of South Korea would be compelled to act," Graham said on NBC's Sunday talk show "Meet the Press." "I think the North Koreans are overplaying their hand."
Graham lauded the Obama administration for its handling of the crisis so far and called on China, the North's closest ally, to intervene and force Kim to stop the bellicose rhetoric. Graham said China fears a reunited, democratic Korean peninsula next door.
"They don't want a democratic Korea next to China, so they're propping up this crazy regime -- and they can determine the fate of North Korea better than anybody on the planet," he said.
2014: The Year in Music [PHOTOS]