SEOUL- North and South Korea exchanged artillery fire near their disputed sea border on Wednesday, highlighting instability along a heavily armed frontier for the second time in three months.

North Korea warned the South that more rounds were on the way as a part of military training, and then fired off another barrage a few hours after delivering the message in a state media report.

Analysts doubt the latest clash will escalate and see it more as an attempt by Pyongyang to stress tensions on the Korean peninsula and press home its demand for a peace deal that would open the way to international aid for its ruined economy.

No one can argue about the premeditated exercises staged by Korean People's Army units in waters of the North side, the North's KCNA news agency quoted the general staff of the country's army as saying.

North Korea has more than 10,000 pieces of artillery aimed at the wealthy South and which could in a matter of hours destroy much of the capital Seoul, 25 miles from the border.

South Korea's Joint Chiefs of Staff said the North fired artillery from land toward the South but landing on its side of the disputed sea border off the west coast.

South Korea returned fire from its coastal artillery.

We want to express grave concern over the incident that resulted from the North's illegal act that unnecessarily creates tension through live-fire artillery fire, the South's Defense Ministry said in a message to the North.

South Korea's Yonhap news agency said the North probably fired about 30 rounds of artillery and Seoul responded with about three times the number.

The firing came when President Lee Myung-bak was traveling to Davos in Switzerland for the World Economic Forum after a state visit to India.

His office was quoted by Yonhap as saying both sides fired into the air and there were no casualties.

Earlier this week Pyongyang accused the South of declaring war by saying it would launch a pre-emptive strike if it had clear signs the North was preparing a nuclear attack.


The latest clash also comes amid signals from Pyongyang it was ready to return after a year-long boycott to six-country talks -- between the two Koreas, China, Japan, Russia and the United States -- on ending its atomic arms programme.

North Korea may want to return to the six-party talks, but only to ease pressure on itself and gain more economic assistance, which it really needs now, said Zhang Liangui, who is an expert on North Korea at the Central Party School, a prominent institute in Beijing.

So North Korea wants to control the pace of contacts with South Korea and the United States. Incidents such as this are a way for it to show that it can control how and when there is any progress, Zhang said.

In return for resuming disarmament negotiations, North Korea has demanded talks on a peace treaty with the United States to finally end the 1950-53 Korean War and the lifting of U.N. sanctions over its two nuclear tests.

Analysts say tightened sanctions since last year have badly hit the failing economy, especially its main export -- weapons.

There have also been overtures for dialogue with Seoul after two years of increasingly tense ties with the government of President Lee Myung-bak who has linked improved relations to action by the North to disarm and end the security risk affecting the peninsula and the rest of prosperous North Asia.

News of the firing rattled markets which soon recovered. Analysts saw little long-term impact from the standoff.

North Korea has declared a no-sail zone in the Yellow Sea waters for two months ending in late March, a sign it might be preparing to test fire missiles.

The area is near a contested sea border between the rival Koreas that was the site of a brief naval clash in November as well as deadly confrontations in previous years between the states which are technically still at war.

About a month before that clash, North Korea raised regional security concerns by firing short-range missiles off its east coast.

(Additional reporting by Jon Herskovitz, Christine Kim and Jungyoun Park in Seoul and Chris Buckley in Beijing; Editing by Jonathan Thatcher and Sanjeev Miglani)