The annual military exercise called "Key Resolve" comes days after the U.N. Security Council passed new sanctions against North Korea for conducting a third nuclear test in defiance of U.N. regulations.
The North, which is said to be furious over the sanctions and the U.S.-South Korea joint military drills, has threatened to launch nuclear strikes against the two allies and scrap the 1953 armistice that ended the Korean War.
Pyongyang has said it considers the military drills an invasion into its territory and has threatened to shutdown a Red Cross hotline that the North and South use for general communications and to discuss aid shipments.
"There is some real concern about the level of rhetoric coming out," said BBC News China correspondent Damian Grammaticas. "North Korea has already said that it reserves the right to a pre-emptive nuclear strike against aggressors."
Analysts believe that although Pyongyang is working toward building a nuclear weapon, small enough to mount a missile, it isn't technically capable of doing so, yet.
Seoul officials confirmed that the North had apparently carried out its threat to cut off the Red Cross hotline.
"We called at 9 a.m. and there was no response," a South Korean government official told Reuters. The hotline is tested each day.
Pyongyang also has threatened to cut off another hotline that is used to communicate with the U.N. base in South Korea.
The massive two-week-long, computer-simulated military exercises between the South and the U.S. will last until March 21 and are expected to see the participation of 10,000 Korean forces and 3,500 American personnel.
U.S. Gen. James Thurman, commander of the Combined Forces Command, said, according to the South’s official news agency, Yonhap News, "This year is particularly important, because it is the first time the ROK Joint Chiefs of Staff have planned and executed this combined exercise. In doing so, they are taking great strides to assume wartime operational control of forces in December 2015."
Meanwhile, reports from the South indicate the North is preparing to carry out massive military drills at its eastern province this week in the wake of the U.S.-South Korea drills.
"The North Korean military is believed to have intensified military training in light of key resolve," South Korean Defense Ministry spokesman Kim Min-seok said in a briefing, according to Yonhap News. "Currently, no special activities are observed in the North."
The Korean Peninsula remained tense and observers said any provocation from either side during the military exercises could inflame the situation. The North has set no-fly and no-sail zones on its east and west coasts, indicating it may fire short-range missiles during the drills, if the zones are violated by the allies.
Political observers pointed out that any accident during the military drills could result in a flare-up that could lead to a confrontation.
The North’s February nuclear test and successful launch of a missile along with fiery-worded threats to launch nuclear strikes against Seoul have heightened fears in the South of a possible attack.
South Korean leaders have typically react with restraint to the North’s threats, but recent coverage and comments from the South’s media and politicians point toward rising intolerance toward the North, among South Koreans, a New York Times report said.
To be sure, leaders in the South have started responding to the North’s threats in stronger language, and new President, Park Geun-hye, has vowed a swift response if her country is attacked.