North Korea twice fired shells near the flashpoint Yellow Sea border with South Korea Wednesday, prompting warning shots from the South's marines in response, Seoul's military said.

The incidents fuelled already high tensions along the disputed sea border, which saw bloody naval skirmishes in recent years and a deadly shelling attack on South Korea's Yeonpyeong island last November.

The North denied shelling, with its state news agency saying Thursday that Seoul was "faking up" the latest incident after "normal blasting" took place as part of construction work, but linking the events with joint US-South Korean military drills set for this month.

Seoul's defence ministry said a North Korean shell landed near the border -- known as the Northern Limit Line (NLL) -- at 1:00 pm (0400 GMT).

Marines based on Yeonpyeong island broadcast a warning and then fired three warning shots from K-9 self-propelled guns.

The North's coastal artillery fired again at 7:46 pm towards the border and the South again fired warning shots in response, a ministry spokesman told AFP.

"North Korea fired two shots and one shell landed near the NLL. Our side fired three shots from the K-9," he said. "There were no more shots afterwards but we're now closely watching the situation."

The ministry said the initial shells may have been fired during a training exercise.

Citing the North's envoy to working-level military talks with the South, Pyongyang's official Korean Central News Agency (KCNA) said in a report issued early Thursday that Seoul had fabricated the incident.

"There was normal blasting in the area of South Hwanghae Province close to the five islands in the West Sea of Korea on August 10 as part of the brisk construction of a gigantic object aimed at improving the standard of people's living," KCNA said, without identifying the object.

"The South Korean military warmongers spread misinformation that the army of the DPRK (Democratic People's Republic of Korea) perpetrated a shelling 'provocation'," it said.

Referring to joint South Korean-United States military exercises due to take place from August 16, it said: "The DPRK side sent an open letter to the US and the South Korean authorities ... urging them to cancel their projected Ulji Freedom Guardian joint military exercises this year.

"What merits a serious attention is that they faked up the above-said case to achieve their sinister aim to stage this sabre-rattling as planned at any cost."

Ulchi Freedom Guardian is an annual exercise in which, according to reports, US and South Korean troops will this year practise destroying North Korean weapons of mass destruction.

Wednesday's incident came after the North made apparent peace overtures in recent weeks and expressed interest in restarting stalled six-nation nuclear disarmament talks.

Nuclear envoys from the two Koreas held rare talks in Bali last month, and a senior North Korean official visited New York later for discussions with US officials.

Following Wednesday's shelling, the United States called for North Korea to show "restraint".

"Our understanding is that this exchange of fire has now ended. That's a good thing. We call on the DPRK (Democratic People's Republic of Korea) to exercise restraint," State Department spokeswoman Victoria Nuland said.

She said North Korea should "begin to take steps" aimed at restarting the six-party talks involving the two Koreas, China, Japan, Russia and the United States.

Troops on Yeonpyeong and other frontline islands have been on high alert since last November's bombardment there, which killed four South Koreans including two civilians and damaged scores of buildings.

The government has reinforced troops and sent extra weaponry to the islands.

The firing in early afternoon briefly sparked alarm on Yeonpyeong, where some 1,800 civilians live along with the Marine garrison.

The NLL was drawn unilaterally by United Nations forces after the 1950-53 war. The North refuses to accept it and says it should run further to the south.

The boundary line was the scene of deadly naval clashes in 1999, 2002 and November 2009. The South also accuses the North of torpedoing one of its warships near the NLL in March 2010, with the loss of 46 lives.

The North denied the charge but last November shelled Yeonpyeong in the first attack on a civilian-populated area in the South since the war.

The North said it was responding to a South Korean artillery drill which encroached into its waters.