South Korean troops Monday staged a live-fire artillery exercise near the disputed Yellow Sea border despite threats from North Korea's new leadership of "merciless" retaliation.

The defence ministry said the Marine Corps -- which guards "frontline" islands near the flashpoint border -- began the exercise at about 10 am (0100 GMT) and ended it before noon.

About 1,400 civilians living on the islands were evacuated to bomb shelters during the drill, a local official said.

"No unusual movement was detected from the North Korean side during the drill, the second of its kind this year," a ministry spokesman said, adding K-9 self-propelled howitzers, Vulcan cannon and mortars were fired.

He declined to confirm a Yonhap news agency report that the Marines fired some 5,000 rounds into South Korean waters.

The North was notified of the scheduled exercise at the border truce village of Panmunjom on Sunday. Hours afterwards its military vowed "merciless retaliatory strikes" if any shells land in waters claimed by Pyongyang.

It said Seoul "should not forget the lesson" of the bombardment of Yeonpyeong island in November 2010, which killed four South Koreans.

The North justified that attack as retaliation for the South's live-fire exercise which allegedly dropped shells into the North's waters.

The 2010 attack briefly sparked fears of war and triggered a major South Korean military build-up on the islands. Seoul has vowed to hit back harder, using air power, for any fresh strike.

Seoul's unification ministry, which handles cross-border ties, said the regular exercise was held to safeguard national security and was not related to inter-Korean relations.

The drill is taking place during the delicate transition period following the death in December of the North's longtime leader Kim Jong-Il, who was succeeded by his young and untested son Jong-Un.

Jong-Un "faces a tough task in shattering this perception that he is a young, weak and inexperienced leader", said Paik Hak-Soon of South Korea's Sejong Institute think-tank who criticised the timing of the exercise.

"So he's more likely to take bold, unannounced military actions to break such a perception," Paik told AFP. "So the South right now is taking a lot of risk as far as I see."

Jang Yong-Seok, from the Institute for Peace and Unification Studies at Seoul National University, said the North is trying to sway public opinion in the South before April's parliamentary election.

It "is trying to make it look as if the South's current administration is to blame for all inter-Korean military tension," Jang told Yonhap.

The US and South Korean navies Monday started a separate five-day joint anti-submarine drill further to the south in the Yellow Sea to guard against potential attacks by the North.

It reportedly involves some 20 craft including two Aegis ships from the US and one from Seoul as well as Lynx helicopters and surveillance aircraft.

A major annual US-South Korean exercise known as Key Resolve will start on February 27 and continue until March 9. North Korea denounces such joint drills as a rehearsal for invasion.

Paik said the North may tolerate the joint exercises but Monday's live-fire exercise solely by the South would be seen as more of an inter-Korean issue.

"Tension is constantly escalating and it may soon reach the point where the North will seriously launch attacks on the South," he said.