South Korean marines were on guard Tuesday to protect a Christmas tree, the latest focus of tensions with North Korea following Seoul's artillery drill near the disputed sea border a day earlier.

A South Korean church switched on Christmas lights in the shape of a tree atop a military-controlled hill near the tense land border -- the first such display for seven years.

"This is purely for religious purposes," pastor Koh Young-Yong told AFP, adding the ceremony drew about 300 church members.

The event came a day after South Korea staged a live-fire exercise on the border island of Yeonpyeong, which was bombarded by North Korea last month.

The North forswore retaliation despite previously vowing a deadly response to the South's drill. But officials were concerned the Christmas tree could become a target for attack.

When asked by lawmakers if South Korea would fire back in case of a North Korean attack on the Christmas tree, Defence Minister Kim Kwan-Jin replied: "We are ready to retaliate resolutely so that the source of gunfire will be removed."

A defence ministry spokesman said: "Marines are maintaining the highest level of alertness around the hill," citing the North's continued threats to strike border propaganda facilities.

The 155-metre (511-foot) hill, about three kilometres (two miles) from the border, is within range of North Korean gunfire.

The two Koreas in 2004 reached a deal to halt official-level cross-border propaganda and the South stopped its annual Christmas tree illumination ceremony.

The communist North had accused the South of displaying Christmas lights to spread religion among its people and soldiers. The North's constitution provides for religious freedom, but the US State Department says this does not in practice exist.

The South has partially resumed a cross-border government propaganda campaign following the March sinking of a South Korean warship and the bombardment of Yeonpyeong, which killed four people including two civilians.

Soon after last month's artillery attack, the South's military reportedly floated 400,000 leaflets across the border denouncing the North's regime.

The South has also installed loudspeakers along the land border but has not yet switched them on. They are designed to blast anti-regime and pro-democracy messages deep into the border region.

North Korea has threatened to open fire on the speakers if they are switched on, and also to fire at locations from where leaflets are released.

Private activist groups frequently float huge balloons across the heavily fortified frontier. These carry tens of thousands of leaflets denouncing the regime of Kim Jong-Il.