North Korea and South Korea on Tuesday exchanged several rounds of artillery fire across the disputed Yellow Sea, leaving at least two South Korean marines killed and 16 others injured in shelling by the North on a populated island.

The South Korean government blamed the North for starting the exchange, saying dozens of rounds of artillery shells were fired at its Yeonpyeong Island, which lies along the disputed maritime border off the western coast of the Korean Peninsula. It is inhabited by around 1,600 people.

The South accused the North of violating the 1953 Armistice Agreement and responded by putting its military on the highest level of non-wartime alert, even readying F-16 fighter jets.

The North Korean government, however, disputed this version, saying its firing was in response to live-ammunition military drills that the South has been conducting in recent days. A statement from the official Korean Central News Agency (KCNA) said the South had “recklessly fired into our sea area.”

South Korean television showed images of burning homes in the island and said three civilians were among those injured. South Korean President Lee Myung-Bak called for calm, but ordered his military “to strike North Korea's missile base around its coastline artillery positions if it shows signs of additional provocation,” the Seoul-based Yonhap news agency reported.

The South also announced that it had postponed the earlier scheduled Red Cross talks with the North, instituted a ban on its nationals travelling across the border and begun exploring ways for United Nations action to condemn Pyongyang.

The exchange has further heightened tensions in the region and reduced the likelihood of resumption of the stalled Six Party Talks, which the North quit two years ago after conducting several missile tests. Saturday's revelation that the North had opened a new uranium enrichment facility had already strained ties between the neighbours in recent days. And, in March, the North was widely condemned for the torpedoing of a South Korean warship, the Cheonan, which left 46 sailors dead. The North has denied responsibility for the attack.

The recent resurgence in tensions takes place amid political uncertainties in Pyongyang, with North Korean leader Kim Jong-il preparing for the succession of his 26-year-old son Kim Jong-un.

Tensions are unlikely to subside in coming days, with the South's military drills in the Yellow Sea, involving around 70,000 troops, scheduled to continue till November 30.

North Korea's KCNA warned of further firing if the drills continued. “The South Korean enemy, despite our repeated warnings, committed reckless military provocations,” it said in a statement.

Western governments condemned the North. The White House described the attack as “belligerent.” Russia warned of “colossal danger” if tensions escalated, but reiterated its support for diplomatic means, and not additional sanctions, to address the situation.

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