North Korea fired more than 80 shells into the sea near its disputed maritime border with South Korea on Wednesday, officials said, sparking an artillery exchange which fuelled tensions on the peninsula.

The communist state's land batteries lobbed about 30 shells in the morning and more than 50 in the afternoon, according to Seoul's Joint Chiefs of Staff.

Ignoring a strong protest from the South, the North said it had every right to carry out an annual live fire drill and would continue the exercise. A day earlier it had declared two "no sail" zones in the area.

The morning barrage lasted more than one hour, Seoul officials said, and South Korean Marines stationed on a nearby island responded with about 100 warning cannon shots. There were no casualties.

The South did not respond to the afternoon's salvo, which again landed on the North Korean side of the contested sea border.

Analysts said the drill was partly aimed at highlighting Pyongyang's demand for talks with the United States on a formal peace treaty to end the 1950-53 war before it returns to nuclear disarmament talks.

They said an escalation was unlikely but not impossible on the border, the scene of deadly naval battles in 1999 and 2002. In the latest clash, last November, a firefight left a North Korean patrol boat in flames.

A Joint Chiefs spokesman said they had information the drill would continue through Friday.

Seoul's defence ministry vowed in a message to the North to "strongly react" to any provocative acts.

"The North committed a gravely provocative act by declaring no-sail zones in the Yellow Sea in breach of the (Korean War) armistice and the inter-Korean non-aggression pact," it said in a statement.

"We expressed grave concerns over the North's threatening behaviour and demanded an immediate halt to all such activities," it said.

"The military will strongly react to any provocative acts by the North and all the responsibility for consequences will rest with the Northern side."

The borderline was drawn up by United Nations forces after the war. The North refuses to accept it and says it should run further to the south.

The two nations have remained technically at war since their conflict ended only in an armistice.

The North, hit by sanctions for its nuclear and missile programmes, has sent mixed messages in recent weeks.

It is pressing to upgrade or restart joint business projects with the South, while the military has threatened its neighbour with war.

Media reports that the South has drawn up a contingency plan for regime collapse in Pyongyang angered the North, as did Seoul's warning that it would launch a preemptive strike to foil any threatened nuclear attack.

"By increasing tension on the peninsula, North Korea is making a gesture to the United States that peace talks are important," said Kim Yong-Hyun, of Seoul's Dongguk University, adding it was also responding to Seoul's recent comments.

Armed clashes are unlikely but not out of the question, Kim told AFP.

"The regime is expressing anger towards South Korea," said Cheong Seong-Chang, of the Sejong Institute think-tank.

"At the same time, heightened tension in a disputed area will help North Korea highlight its demand for a peace treaty," Cheong said.

Baek Seung-Joo, of the Korea Institute for Defence Analyses, said the North was "unlikely to take things to the extreme, as in general it wants to maintain economic cooperation with South Korea".

Unification Minister Hyun In-Taek, in charge of cross-border relations, said South Korea would push ahead with economic talks with the North due on Monday.

But the artillery barrage, he said, "reflects a very disappointing attitude" on the North's part. "Unnecessary acts raising tension must be stopped immediately."

Washington called North Korea's shelling "provocative" and urged restraint.

"The declaration by North Korea of a no sail zone and the live firing of artillery are provocative actions and as such as not helpful," State Department spokesman Philip Crowley told reporters.

Pentagon spokesman Geoff Morrell said: "We clearly are discouraging any further acts of aggression which would in any way increase the tensions along this historically disputed boundary area."