North Korea has pledged to retaliate for South Korean shelling, which came after the South accused the North of firing a single rocket at a South Korean town.

There were no casualties in Thursday's shelling, which comes as tension between the two neighbours is soaring after South Korea resumed broadcasting anti-North Korean propaganda across the border after an 11-year lull.

South Korea fired dozens of shells at the North after it said artillery round hit the town of Yeoncheon, from where loudspeakers are blasting propaganda messages.

Officials in Seoul said the North fired the rocket across the Demilitarised Zone (DMZ) to back up an earlier threat to attack South Korean border loudspeakers. 

South Korea and the US are holding annual military drills that the North claims are a rehearsal for the an invasion [AFP]

The North denied it fired any shots and warned of retaliation for what it called a serious provocation.

"Using the pretext that our forces fired one shell to the South, which is not true, it made reckless moves by firing 36 shells at our military posts," said the statement published by the North's state media.

It said the shells landed near four military posts, but caused no injuries.

"This reckless shelling incident is a serious military provocation to our sacred territory and military posts which is intolerable," the statement said.

About 80 residents in the town where South Korean officials say the shell fell, Yeoncheon, were evacuated to underground bunkers, and authorities urged other residents to evacuate, a Yeoncheon official told the Associated Press news agency.

The incident comes at a time when South Korea and the US are holding annual military drills that the North has long said are a rehearsal for the invasion of their country.

The South recently restarted the propaganda broadcasts because it claims the North planted land mines on the South Korean side of the DMZ that maimed two South Korean soldiers earlier this month. North Korea has denied that claim as well.

Emergency meetings

South Korea's defence ministry said in a statement that its artillery shells landed at the site where North Korea had fired its rocket. There were no other details from the military.

South Korean President Park Geun-hye convened an emergency National Security Council meeting and ordered South Korea's military to "resolutely" deal with any provocation by North Korea.

North Korea, meanwhile, convened an enlarged emergency meeting of the central military commission of its ruling party.

North Korea warned in a message it will take further military action within 48 hours if South Korea does not pull down the loudspeakers, according to the South.

North Korea has also restarted its own propaganda broadcasts.

The Koreas' mine-strewn DMZ is a legacy of the 1950-53 Korean War, which ended with an armistice, not a peace treaty, leaving the Korean Peninsula still technically in a state of war.

Dozens of people on the South Korean side of the border were evacuated too underground bunkers when the North's shell fell [AP]

Source: Agencies