The newly announced drill will take place 50km north of Seoul and will also involve artillery and fighter jets [AFP]

South Korea will hold its largest-ever live fire drill near the military border with North Korea in a show of force just as tension on the peninsula was easing after Pyongyang's attack on a southern island.

The drill on Thursday, involving the largest number of personnel in a peace-time exercise, comes after the South's artillery exercise on Monday on the island of Yeonpyeong. The move is bound to infuriate the North.

North Korea this week offered to re-admit UN inspectors to its nuclear-weapon programme, leading to speculation of a resumption of the six-party disarmament talks and a general sigh of relief around the world that the crisis had passed.
 
"Yes, it will be a show of force against that," an army officer said when asked if the shelling of Yeonpyeong last month was a factor in the new drill's planning.

He added similar drills had been staged previously on more than 50 occasions, but the scale this time was unprecedented.

It will take place in Pocheon region, less than 50km north of downtown Seoul and will also involve artillery and fighter jets.

Naval exercise

South Korea is also holding three-day live firing drills off the peninsula's east coast starting on Wednesday, a media official at the defence ministry said.

He did not provide details but Yonhap news agency said the drills were taking place about 100km south of the maritime border with North Korea and involved at least six naval boats.

Al Jazeera's Steve Chao, reporting from Seoul, said "the South Korean’s think it is not the time to sit down and talk".

"This drill is seen as a continuation of South Korea's hard-line policy towards the North. […] They believe that in the past the softer diplomatic approach has not worked and they believe that if they show a great degree of force, North Korea will back down.

"South Korea's line continually has been that any kind of drill on their territory is their sovereign right," our correspondent said.

"They claim that this drill is routine, that it was scheduled long before the attack on Yeonpyeong island from the North. So [the South says] the North really has no justification for retaliation."

The Korean crisis peaked when Pyongyang shelled Yeonpyeong just south of the disputed border, killing four people - including two civilians - in the worst attack on South Korean territory since the end of the civil war in 1953.
 
The South carried out live fire drills on Yeonpyeong on Monday, which provoked only a verbal reaction from the North.

North Korea had vowed to strike back if the South went ahead with the drills, prompting fears of all-out war.
 
China, North Korea's only major ally, has continually urged dialogue to resolve the crisis and urged Pyongyang to follow through on its offer to allow UN inspectors into the country.

The Chinese foreign ministry had no immediate comment on the planned drill. Seoul's Joongang Daily said South Korea should practice "nimble diplomacy" and forge a closer relationship with China.

'Military on high alert'

"As long as there is a constant threat from the North to launch a surprise attack, we must be on high alert from a military perspective," the newspaper said.

"But such preparations should be combined with diplomacy. We should reduce our diplomatic dependence on the United States and strengthen our ties with China and Russia."

Finance minister Yoon Jeung-hyun, speaking before the announcement of the drill, said that domestic financial markets had weathered the crisis and the South Korean economy, Asia's fourth-largest, stayed on a growth track.

But he warned that the tension could still dent consumer spending with a key sentiment measure due on Friday.

"Financial markets have been absorbing the North Korea risk without big trouble but we can't rule out consumer spending getting hurt (by the tension)," Yoon said during a weekly meeting of senior economic officials.

The won edged down slightly while stocks and bonds were stable as traders shrugged off the North Korea risk.

Traders said earlier on Wednesday that the currency was generally being affected more by concern over the euro zone.

Consumers and businesses in South Korea say they have lived with tensions on the divided peninsula for decades and markets do not always react although the recent crisis had rattled global markets and remained an underlying risk.

Source: Agencies