The navy said 10 warships, including a 3,500-tonne destroyer, fired artillery and dropped anti-submarine bombs as part of the one-day exercise.

In Seoul, the South Korean capital, tens of thousands of people gathered to protest against the North.

Rising tensions

The developments came amid tensions on the divided peninsula that have risen since a team of international investigators said last week that a torpedo fired by a North Korean submarine tore apart and sank a South Korean warship on March 26, killing 46 sailors.

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But the North accused South Korea's government of falsely blaming it for the sinking, partly to help the ruling party in local elections due to be held next week.

Hillary Clinton, the US secretary of state, during a visit to South Korea on Wednesday, called on the international community to issue a strong response to the sinking of the ship.

"This was an unacceptable provocation by North Korea and the international community has a responsibility and a duty to respond," Clinton said after talks with South Korean leaders in Seoul.

The sinking of the Cheonan "requires a strong but measured response", she said, adding that the US would consult South Korea and members of the UN security council on what the appropriate action would be.

Al Jazeera's Tony Birtley, reporting from Seoul, said Clinton's three to four hour stopover was to show US solidarity with South Korea and to brief officials there on what China - where Clinton had just visited - was saying about the situation.

Chinese influence

China, the North's only major ally who in effect bankrolls its economy, has studiously tried to keep out of the fray, urging calm and refusing to voice support for the international report on the Cheonan sinking.

On Wednesday, China's foreign ministry repeated calls for calm and restraint, with Zhang Zhijun, the vice-foreign minister, saying China had no first-hand information on the sinking.

"We have always believed that dialogue is better than confrontation," Zhang said.

Most analysts doubt either side would deliberately risk a war, but say there is a serious risk that small skirmishes along the heavily-defended border could turn into a broader conflict.

Some worry pushing Kim Jong-il, the North Korean leader, too far may leave him little choice but to fight back to try to save his family's more than 60-year hold over the destitute country as he tries to secure the leadership succession for his youngest son.