|South Korea's warships are staging a four-day exercise 100km south the North Korean maritime border [AFP]
North Korea's minister of armed forces has said its military is prepared to wage a "holy war" against South Korea using its nuclear deterrent after what he called Seoul's attempt to initiate conflict.
Minister Kim Yong-chun repeated Pyongyang's charge on Thursday that the South is preparing to start a war by conducting the live fire drills close to the border of the North.
He was quoted by North Korea's KCNA news agency, which regularly threatens the South, but which had up to now been relatively restrained in its criticism of the miltiary drills.
In a show of military might, South Korea started a major land drill in the Pocheon region on Thursday morning, between Seoul and the heavily armed demilitarised zone (DMZ) separating the two Koreas.
It also continues with naval live fire exercises 100km south of the maritime border with North Korea.
The drill, involving a larger scale of firepower and personnel than the usual exercise at the army training ground, is an indication that Lee Myung-bak, South Korea’s president, wants to underscore renewed determination to stand tough with the North.
Al Jazeera's Steve Chao, reporting from Seoul, says South Korea sees the drills as justified "as it is taking place on its sovereign territory".
"However, they have made it very clear that they are willing at this point to escalate tensions in favour of its hardline policy adopted since the North Korean attack in November. That is the mood of the government here and they seem very intend to move ahead with this."
Lee has replaced his top defence officials with more hawkish military men, a response to criticism of a perceived weak response to hostile acts from the North, including an alleged submarine attack in March and the shelling of an island last month.
"We're keeping up the alert," a defence ministry official said on the condition of anonymity.
A large contingent of mechanised units operating tanks, three dozen self-propelled artillery, fighter jets and multiple rocket launchers, are taking part in the live fire drill just miles from the border with the North.
"(South Korea) is trying to hide the provocative nature toward the North of the war exercises," Pyongyang's official KCNA news agency said in a comment issued in the form of a news dispatch rather than in the name of any government organisation.
The South Korean Army is making no secret that the drill is aimed at displaying its firepower to its neighbour.
"Yes, it will be a show of force against that," an army officer said on Wednesday, when asked if the shelling of South Korea's Yeonpyeong island last month was a factor, although he said similar drills had been staged before.
Seoul's financial markets were steady as investors kept a close eye on how North Korea will react to the drills, although the Pyongyang's threatening remarks had in the past failed to have a lasting effect.
In the run-up to the drill, the North's reaction was relatively calm in comparison with its threats of a retaliatory strike made as recently as last week, before Monday's live firing drill on Yeonpyeong, which lies in disputed waters off the west coast of the peninsula.
Its official Rodong Sinmun newspaper accused the US of conspiring with the South and Japan to bring war to the Korean peninsula.
"The Korean peninsula has turned sharply unstable on the brink of war due to scheming by the US to militarily stifle the North," the commentary said.
'Retaliatory strike unlikely'
Analysts say the North is unlikely, in the near-term at least, to launch a further attack against the South like last month's shelling of Yeonpyeong or the alleged sinking in March of the Cheonan warship.
The South accuses North Korea of sinking the vessel, though the North denies involvement.
For now, the North is likely to wait and see if its latest actions, including an offer to readmit international nuclear inspectors, yield results, such as a return to international talks on Pyongyang's nuclear programme.
China, the impoverished North's only major ally, has urged dialogue to resolve the crisis and has been reluctant lay to blame, frustrating Washington and its allies which want Beijing to do more to rein in Pyongyang.
Barack Obama, the US president, is expected to press this point when Hu Jintao, the Chinese president, visits the US on January 19.
Despite the North's muted response this week, South Korea should not be complacent because Pyongyang will probably strike again when the conditions are right, Andrei Lankov at Kookmin University in Seoul said.
"The North Korean leaders did not duck the fight this time because they were afraid," he wrote in Financial Times earlier this week referring to the Monday's drills.
"Rather, they did what a cold-minded tactician should do: they avoided an engagement under unfavourable conditions chosen by the opponent, in order to strike the opponent at the time and place of their own choice, suddenly and forcefully."