"The reckless military provocations... have created such a serious situation that a naval clash may break out between the two sides in these waters," the naval command said.

The North frequently accuses the South of breaching the disputed sea border in the Yellow Sea, the scene of bloody naval clashes in 1999 and 2002.

But Thursday's bellicose statement follows a series of recent peace overtures from Pyongyang. On Wednesday it had made a rare apology to Seoul for causing a deadly cross-border flood.

The communist state's navy said that on Monday alone the "warmongers" had crossed the border 10 times on the pretext that North Korean fishing boats had intruded into the South's waters.

It said the incursions were part of "premeditated moves to deliberately escalate tension in the waters, a hotbed of conflict, and deteriorate the North-South relations once again.

"It is clear to everyone what consequences the third skirmish in the West Sea of Korea (Yellow Sea) will entail," the command said in a statement on the official news agency, adding that "warnings are bound to be followed by actions".

North Korea refuses to accept the border known as the Northern Limit Line (NLL), which was drawn by United Nations forces after the 1950-53 war.

South Korea's Joint Chiefs of Staff denied the allegations.

"South Korean navy boats have never crossed the NLL into North Korean territorial waters," a spokesman told AFP. "The North, again, is trying to nullify the NLL with its usual claims."

Cross-border military tensions have eased since the North began making peace noises to both Seoul and Washington in August.

Last week the North expressed conditional willingness to return to six-party nuclear disarmament talks, which it quit in April before testing an atomic weapon for the second time.

It insists, however, on first holding bilateral talks with the United States.

On Monday the North test-fired five short-range missiles in what some analysts saw as a show of strength before any US talks.

Seoul's Unification Minister Hyun In-Taek said it was unclear if recent conciliatory gestures indicated a genuine change of heart.

"We are at the moment cautiously observing what the true intention of North Korea is," he said in a speech to the European Union Chamber of Commerce.

Hyun said it was still unclear whether the North had given an explicit commitment to return to six-party talks.

While more and more people worldwide were becoming pessimistic about denuclearisation, he said, "I believe in the end that denuclearisation of North Korea will be possible.

"If the international community continues a united and coordinated stance North Korea will have no other choice but to denuclearise."

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