South Korea on Thursday kicked off an annual, large-scale military exercise aimed at countering threats from North Korea at a time of heightened cross-border tensions.

The week-long military manoeuvres will involve 240,000 army, navy, air force and marine corps personnel, along with police officers, according to the Joint Chiefs of Staff (JCS).

About 500 US soldiers will also take part in the exercise, which Pyongyang had condemned in the past as tantamount to "a war of aggression".

Some 28,500 US personnel are stationed in the South -- a legacy of the 1950-53 Korean War that ended with a ceasefire but not a peace treaty, leaving the two Koreas still technically at war.

This year's Hoguk exercise has been enlarged "to prepare for provocations by North Korea and an all-out war, considering the recent security situations," the JCS said.

It will feature drills against infiltration, regional provocation as well as full-scale conflict.

With South Korea gearing up for a presidential election in December, tensions on the Korean peninsula have risen steadily in recent months.

Pyongyang was particularly enraged by a recent US-South Korea agreement to almost triple the range of the South's missile systems to 800 kilometres (500 miles) to cover the whole of North Korea.

The communist North slammed the deal, and warned that it possessed rockets capable of striking the US mainland.

Earlier this week, South Korean police barred activists from releasing anti-Pyongyang propaganda leaflets across the border after the North threatened to respond with an artillery barrage.

Cross-border ties have been generally icy since Seoul accused Pyongyang of torpedoing one of its warships in March 2010 with the loss of 46 lives.

The North denied involvement but went on to shell a border island in November of the same year, leaving four South Koreans dead.

On Wednesday, during talks with South Korean Defence Minister Kim Kwan-Jin in Washington, US Defence Secretary Leon Panetta stressed that North Korea remained "a serious threat" to both countries.

"Over the past year, North Korea has continued its pattern of defiance and provocative actions, including the unsuccessful test of a ballistic missile capability," Panetta said.

Acts of aggression or military provocation "will not be tolerated... and we will continue working shoulder to shoulder to demonstrate our combined resolve," he added.