Korean Peninsula On The Brink Of War

[BRVoice]

http://www.channelnewsasia.com/stori...100461/1/.html


China demands South Korea pay for sunken fishing boat
Posted: 21 December 2010 - 21:27 hrs

BEIJING: China on Tuesday demanded that South Korea pay compensation for the sinking of a Chinese fishing boat in which one man was killed and punish the coastguard ship involved in the incident.

The 63-tonne Chinese fishing boat capsized after ramming into a 3,000-tonne South Korean coastguard ship on Saturday, leaving one Chinese crew member dead and another missing, according to South Korean officials.

Eight other Chinese fishermen were rescued. Five of them were picked up by nearby Chinese boats, while three were detained by South Korean authorities.

"We express great concern over the incident and have made solemn representations to the South Korean side requiring it to make all-out efforts to search for the missing crew member," foreign ministry spokeswoman Jiang Yu said.

South Korea must "bring the perpetrators to justice, make compensation for the loss of our property and take concrete efforts to prevent such instances from reoccurring."

She dismissed press reports that the Chinese fishing boat had been sent by the government to monitor rising tensions on the Korean peninsula and in the Yellow Sea.

Jiang also said the incident "has no direct relation to the current situation on the peninsula", where tensions have been running high after last month's deadly shelling of a border island by North Korea.

A coastguard spokesman said the Chinese crew brandished iron pipes, clubs and shovels when two small boats from the 3,000-tonne South Korean ship approached their trawler, injuring four officers.

The BBC posted a video of the clash filmed by the coastguard, which appears to show the fishermen fending off the officers with metal bars.

The trawler then suddenly rammed into the coastguard ship and capsized, causing 10 Chinese sailors to fall into the sea, he said.

The fishing boat's 28-year-old captain slipped into a coma after the incident and died in hospital.

Illegal fishing by Chinese vessels is common in South Korean waters. The coastguard said 332 Chinese boats were caught last year.

In 2008, a South Korean officer drowned while trying to inspect a Chinese boat, and 10 officers have been injured this year.

-AFP/ac

[American Patriot]

The 63-tonne Chinese fishing boat capsized after ramming into a 3,000-tonne South Korean coastguard ship on Saturday, leaving one Chinese crew member dead and another missing, according to South Korean officials.

After CRASHING INTO THE Coastie.... the boat sank... and China thinks SK should PAY the damages?

[BRVoice]

http://www.theatlantic.com/internati...m-korea/68276/


In Korea, Planning for the Worst: Mass Evacuation
The Atlantic
Dec 20 2010, 11:33 AM ET

As the Korean peninsula enters what U.S. Secretary of Defense Robert Gates calls "a difficult and potentially dangerous time," the long-dormant Korean conflict is rumbling back into the public consciousness. Government officials from the U.S., South Korea, Japan, the Philippines, and other states throughout the region are planning for the worst-case scenario: renewed war, perhaps nuclear, and a massive exodus from South Korea. If tensions continue to escalate, hundreds of thousands of foreign civilians living in South Korea will flee, sparking one the biggest mass-evacuations since the British and French pulled 338,000 troops out of Dunkirk in 1940.

Even under the best conditions, a mass evacuation is no easy task. In July 2006, as a battle brewed between Israel and Lebanon-based Hezbollah militants, the U.S. took nearly a month to evacuate 15,000 Americans. According to the Government Accountability Office, "nearly every aspect of State's preparations for evacuation was overwhelmed", by the challenge of running an evacuation under low-threat conditions in a balmy Mediterranean summer.

Evacuating a Korean war-zone would be far harder. And the U.S. would likely have no choice but to ask China for help.

If North Korea launches another artillery strike against South Korea--or simply hurls itself at the 38th parallel--the resulting confrontation could trigger one of the largest population movements in human history. According to one account, 140,000 U.S. government noncombatants and American citizens would look to the U.S. government for a way out. And that's just the Americans. Hundreds of thousands of South Korean citizens and other foreign nationals would be clamoring for any way off of the wintery, dangerous peninsula.

In the absolute worst case, tens of millions of South Koreans and hundreds of thousands of foreigners, some wounded, some suffering from chemical, biological or even radiological hazards, will flee in the only direction available to them: south. The country's transportation system would be in nationwide gridlock as panicked civilians avail themselves of any accessible means of travel. In this desperation and chaos, the U.S. military has the unenviable mission of supporting and evacuating U.S. citizens, all while waging a fierce battle along the DMZ.

The U.S. does have a plan. In the event of an evacuation, the State Department and U.S. military say that the U.S. will instigate a prepared noncombatant evacuation operation. The first stop for an evacuee would be a prearranged assembly area for registration, a search, and an identity check. Then, assuming transportation is available, evacuees would be sent by whatever means the military can arrange to relocation centers farther down the peninsula to wait for transportation out of South Korea. Finally, U.S. civilians would gather at evacuation points where they will leave by sea or air to foreign "safe havens," such as Japan, or to the United States. The plan openly admits that things won't go smoothly, even instructing civilians to surrender their personal vehicle to the U.S. military upon arrival to an assembly area because the U.S. military may, in desperation, turn to civilian transport.

On paper, everything looks good, but as Korean tensions increase, the U.S. will have to get serious about evacuation planning. A successful wartime evacuation of the Korean peninsula can be done, and has been before. Sixty years ago this month, as Chinese troops pushed United Nations forces back from the Chinese border, an international fleet of 193 ships rescued around 196,000 soldiers and Korean refugees from Hungnam over just two weeks. However, modern-day evacuees would be far slower and more cumbersome than the well-trained amphibious force that made the Hungnam operation possible. Instead, the evacuation will be more like Dunkirk, where, largely unbidden, a disorganized fleet raced into threatened, shattered harbors to pull whomever they could to safety.

Countries around the globe with civilians or officials in South Korea would look to the U.S. first for evacuation support. But with a war to fight; wounded, contaminated, or infectious casualties to deal with; and amphibious lift resources at a premium, there would not be enough space for all who wish to leave.

Ironically, China, for all it has done to enable the present Korean crisis, may pose the best, last hope for many evacuees. With Korean, Japanese and American transport ships likely to be fully committed to the military conflict, the only other untapped Asian source of heavy amphibious sealift is China. Though often dismissed by military analysts as little more than a garnish for a "million-man swim" to Taiwan, China's amphibious assault fleet could rescue many stranded non-combatants. China's massive civilian fleet offers another possible resource. Plenty of Chinese ships will be available, able to respond if allowed to enter South Korean waters.

Over the course of the past month, the Philippines, one of many countries that lack the resources to carry out a timely evacuation of their Korean-based ex-patriots, has been debating how it could meet the challenge of transporting some 60,000 Filipino temporary workers out of a Korean crisis. For cases like this, where evacuation support will fall far short of demand, China's armada of over fifty relatively modern medium-range amphibious vessels, capable of moving over 20,000 people in a single, albeit uncomfortable and slow voyage, would be an enormous boon.

A Chinese rescue fleet poses a political, operational and symbolic headache for South Korea, the U.S., and Japan. Chinese assistance with a Korean evacuation would be an enormous political coup for Beijing. Even modest Chinese support during a high-profile humanitarian emergency could do a lot to blunt wider Asian concerns over China's naval expansion and territorial ambitions. And in the case of the Philippines, a timely humanitarian gesture by the People's Liberation Army's Navy would strengthen Chinese influence there and maybe even reconcile a festering territorial dispute over their contested South China Sea islets - to China's favor. But the defenders of South Korea would not have any other choice than to ask for China's assistance. No other help is available.

Chinese participation in a Korean contingency is the kind of scenario that makes U.S. policy makers in the region wince. But such are the ugly compromises that must be made if the U.S. and other countries fail to plan now, while there is still time to prepare, for how to get potentially-threatened nationals out before the Korean peninsula lurches over the precipice.


Craig Hooper & Christopher R. Albon - Craig Hooper, a San Francisco-based national security strategist, blogs at NextNavy.com. Christopher R. Albon is a Ph.D candidate at U.C. Davis specializing in the relationship between armed conflict and public health.

[BRVoice]

http://www.ynetnews.com/articles/0,7...002611,00.html


US says no point resuming 6-party North Korea talks yet
12.21.10, 19:22
Israel News

The White House on Tuesday expressed skepticism about resuming six-party talks until North Korea becomes serious about living up to its obligations and stops belligerent actions. (Reuters)

[MinutemanCO]

China demands South Korea pay for sunken fishing boat

Could this be a pretext for escalation on China's part?

[American Patriot]

Could this be a pretext for escalation on China's part?

Maybe, but I'm kind of doubting that.

I can't see China attacking or escalating themselves based on this, since they WERE in the wrong area, and doing so illegally.

Now, had the Coast Guard ship deliberately rammed the fishing vessel, that is a different story. But in the video portions I saw they were trying to order the Chinese to stand down for boarding and the Coasties were being hit with pipes or sticks. Suddenly the trawler yawed over into the Coast Guard vessel and flipped. (I didn't see all that, but that's pretty much what everyone was saying.)

[MinutemanCO]

Understood. The sunken fishing boat could just be an accident at sea.

I'm curious where this ends up, though. I highly doubt that NK is acting unilaterally. I see them as a surrogate for other nations in the same way that Russia utilizes terrorist organizations as surrogates for their own objectives. I would, for my part, caution anyone regarding placing any trust or diplomatic faith in China or Russia, whatsoever. At some point, China will have to place her cards on the table.

[American Patriot]

Understood. The sunken fishing boat could just be an accident at sea.

I'm curious where this ends up, though. I highly doubt that NK is acting unilaterally. I see them as a surrogate for other nations in the same way that Russia utilizes terrorist organizations as surrogates for their own objectives. I would, for my part, caution anyone regarding placing any trust or diplomatic faith in China or Russia, whatsoever. At some point, China will have to place her cards on the table.

I have a feeling most of the people here on this site who follow the players would agree with this assessment.

China is in no way innocent here. Russia however, seemed somewhat surprised toward the end of this, but that could be an act. Honestly, they came off scared of the outcome of this whole thing - and even screamed for a UN Security Council meeting. Again, could be part of the whole power play thing.

People seem to think China and Russia unlikely to attack the United States - but for the most part I think these people are either suffering from wishful thinking or they honestly believe that crap that has been fed to them over the past thirty years.

Russia IS NOT OUR FRIEND. They might be our allies in the war on terror - but were that really true, they would stop Iranian work on the reactors, they wouldn't be selling weapons to the Iranians, they wouldn't be standing up for North Korea.

Plainly the Russians have a dog in this fight - and they are keeping him somewhat muzzled.

China is certainly, by their own admission, not our friend. They are USING the United States and our "consumer power" to undermine the economy. They have stated clearly they wish to be AT WAR with the United States by 2013 or so (I wish I could find that information - I THINK it is on this site someplace, but I can't find the damned reference right now. The CIA reported on this, and there was a full white paper written, which I've read.) The Chinese WANT TO OWN the Pacific Basin and all that entails.

Basically, every single island in the South Pacific, Hawaii, all the way to the coast of Australia and New Zealand, Malaysian, Korea, Japan and perhaps even Alaska are at risk. They would if they could, own and HOLD the California Coast giving them inroads into the USA Proper.

China simply is a Red Communist country who has nuclear capability and will do whatever they can however secretly and quietly they can, to undermine our economy, military and political structure while they simultaneously back engineer every piece of equipment they can get their hands on.

The Chinese and Russians according to an article posted here today, I think BRVoice got it before I did, stated that the Russians and Chinese will do military drills together in the Eastern Sea.

Just bloody wonderful. This was an outward slap at the US.... because we stood up for the South Koreans (GOOD FOR OBAMA for once).

But China and Russia looked weak and impotent when it was all over with.

Now they need to "save face" and are doing this inspite of what has happened the last few days.

In fact, we can't say much to them because they will simply turn the argument back on us. OUR best thing is to ignore them completely, while putting our ships and air forces on high alert, and overfly their asses a few times. I'd have the military do that if it were me - within reason, without creating a worse situation, but giving them a show of power they would balk at messing with.

That's what just happened with North Korea. They balked because they didn't want to deal with the US forces.

This is a might chess match and we'd better damned sure win it. If we don't - within five years we are going to be begging China to help us, instead of the other way around.

[BRVoice]

...

[BRVoice]

http://www.defensenews.com/story.php?i=5287410&c=ASI&s=TOP


China Diplomat: Korea Tensions Came Close To War
AGENCE FRANCE-PRESSE
Published: 21 Dec 2010 15:58

UNITED NATIONS - A top Chinese diplomat said in a Security Council debate on Dec. 21 that hostilities between North and South Korea had come "close to fighting a war."

China's Deputy U.N. Ambassador Wang Min told a Security Council debate with youth from around the world that tensions between the North and South had been very high "especially in the past two days. It came close to fighting a war."

China has blocked Western attempts to condemn North Korea's Nov. 23 artillery attack on a South Korean island that set off the new tensions, according to diplomats.

Wang said China and all 15 members of the Security Council wanted a peaceful end to the tensions.

"Their feud has gone on for decades, it did not start yesterday," Wang said. The two Koreas have remained at an official state of war since their 1950-53 conflict which was halted only with a truce.

"Therefore it is unlikely that the problems can be resolved overnight," he added.

"First of all we hope that they can remain calm, we hope that they will refrain from engaging in any conflict," Wang said.

"Next, what we hope for is for them to sit down to negotiations that will discuss how the problems between them can be addressed through peaceful means," Wang said.

[BRVoice]

http://english.chosun.com/site/data/...122200355.html


N.Korea Deploys More Missiles Along West Coast

North Korea has had extra surface-to-ship and surface-to-air missiles ready near the western coast since early this week in response to a South Korean artillery drill on Yeonpyeong Island, which took place on Monday.

"The North has deployed more SA-2 surface-to-air missiles and Silkworm surface-to-ship missiles at Cape Deungsan on the western coast," in addition to multiple rocket launchers and coastal artillery, a South Korean government source said Tuesday. "It seemed ready to launch some of the surface-to-ship missiles, so our naval ships moved out of range."

The surface-to-ship missiles have a range of 83-95 km, while the Soviet-made SA-2 surface-to-air missile has a range of 30-40 km, which could pose a threat to South Korean fighter jets in operations over areas near the Northern Limit Line, the de-facto maritime border.




Military authorities are closely watching the North Korean military's movements, since there are multiple rocket launchers in areas north of Baeknyeong and Ganghwa islands as well as in Kaemori near Yeonpyeong Island, and coastal artillery remains ready to fire.

The South Korean military remains on high alert as a floodlight tower on Aegibong Peak in Gimpo, Gyeonggi Province, only 3 km from North Korea, was switched back on Tuesday.

In a session of the National Assembly Defense Committee, Defense Minister Kim Kwan-jin pledged to "drastically strike back and annihilate positions they shoot from” if the North fires at the floodlights.

The military is also on the alert for possible provocations in the demilitarized zone, the Seoul metropolitan area and the East Sea, as well as on the five northernmost islands in the West Sea.

The First Navy Fleet is staging a maritime exercise in the East Sea for four days from Wednesday.

Meanwhile, the Army Missile Command, which is equipped with ballistic and cruise missiles with a range of 180-1,000 km, participated in the artillery drill on Yeonpyeong Island. It was ready to strike strategic targets in the North such as nuclear facilities if the situation escalated.

englishnews@chosun.com / Dec. 22, 2010 08:51 KST

[BRVoice]

http://twitter.com/W7VOA

1. #ROK Navy tells VOA 'routine" sea drills also getting underway today through Saturday off east coast. #Koreas 22 minutes ago via TweetDeck
2. #ROK Defense Ministry says Thursday live-fire drill in NE Gyeonggi Prov. is "routine." #Koreas 25 minutes ago via TweetDeck
3. #ROK defense ministry tells VOA doubts Thursday exercise will be "largest ever" but perhaps biggest to take place in winter. 26 minutes ago via TweetDeck
4. USFK says tomorrow is training holiday &it's not having any of its forces involved in any #ROK field exercise Thursday. #Koreas 28 minutes ago via TweetDeck
5. We're checking to confirm: RT @REUTERSFLASH: #ROK army to hold largest-ever live-fire drill on Thursday on mainland near border with North 32 minutes ago via TweetDeck

[BRVoice]

http://af.reuters.com/article/energy...6BL01S20101222


South Korea army to hold largest ever live-fire drill
Wed Dec 22, 2010 2:48am GMT

SEOUL Dec 22 (Reuters) - The South Korean army said it will hold its largest-ever live-fire drill near the military border with the North on Thursday in a show of force in the wake of Pyongyang's attack on one of its islands last month.

The drill, involving artillery, fighter jets and the largest number of personnel in a peace-time exercise, comes after the South's live-fire artillery exercise on Monday on the island near the tensely guarded sea border and is likely to infuriate Pyongyang.

It will take place on the South Korean mainland.

Tension on the peninsula had begun to ease on Wednesday after suggestions the North might admit U.N. nuclear monitors and South Korea's finance minister said the local economy was weathering the standoff.

(Reporting by Jack Kim; Editing by Nick Macfie) (Created by Nick Macfie)

[BRVoice]

http://english.yonhapnews.co.kr/nati...03300315F.HTML


S. Korea to conduct firing drill in East Sea to deter N.K. provocations

SEOUL, Dec. 22 (Yonhap) - South Korea remains prepared for surprise North Korean provocations not only in the tense western border regions, but also in other unforeseen areas, the defense ministry said Wednesday.

The military also plans to conduct naval firing exercises off the east coast from Wednesday through Friday that will include six naval ships and Lynx anti-submarine helicopters.

A Navy official said that the exercise will be held about 100 kilometers south of the eastern sea maritime border with the North. Nearby Army units will be on heightened vigilance during the drill, the official said.


South Korean Marines remain in combat-ready posture on Yeonpyeong Island in this file photo taken on Dec. 21. (Yonhap)


Tensions on the divided peninsula remain high after the North's deadly shelling of the South's Yeonpyeong Island in November, as well as the South's live-fire drill from the same island earlier this week that had been feared to lead to a fresh clash between the two sides.

Though the North did not carry out its threat to strike back if the South pushes ahead with the exercise, there are still concerns that the communist nation could stage unforeseen attacks on the South.

The defense ministry said that the military is maintaining readiness to strike immediately back at the North in case of provocations in the western land and sea border regions, including the front-line Aegibong hill where the South lit up a giant Christmas tree that Pyongyang sees as psychological warfare.

The ministry also plans to keep military alertness at the highest level for the northernmost islands and other border regions for the time being, while continuing to put fighter jets on mid-air standby.

Defense Minister Kim Kwan-jin told lawmakers Tuesday that the military will maintain such readiness until North Korean threats drop visibly. Kim also said that new provocations by the North would likely be surprise attacks, and the South is prepared for various scenarios.

North Korea has also reportedly deployed more surface-to-ship and surface-to-air missiles along its west coast while keeping fighter jets ready to scramble.

The two Koreas are still technically at war as the 1950-53 Korean War ended in a truce, not a peace treaty. The western sea border has been a constant source of military tension between the two sides as the North refuses to recognize the boundary.

(END)

[BRVoice]

A couple of maps to illustrate the areas involved.


The provinces of South Korea. The live fire drill is to be conducted in the NE part of Gyeonggi Province, #8 on the map.




And the naval exercises are being held 100km south of the border of North Korea in the East Sea.

[BRVoice]

http://www.koreatimes.co.kr/www/news...116_78390.html


'North’s special forces may target major facilities'
The Korea Times
12-21-2010 18:10

By Kang Hyun-kyung

A national security expert called Tuesday for the creation of an inter-governmental counter-terrorism unit to prepare for possible attacks by North Korean special forces on the nation’s capital.

During a seminar to review South Korea’s responses to North Korea’s provocations, Kim Hee-sang, chairman of the Korea Institute for National Security Affairs, warned of attacks on Seoul and neighboring cities.

“There are several major facilities in Seoul and cities near the nation’s capital which are vulnerable to North Korean attacks. The possible destruction of those facilities could deal a series blow to the South,” Kim said.

The security expert proposed that the military team up with the National Intelligence Service and the police to prepare for any such attacks.

The suggestion came a day after the North Korean military warned of a deadly attack on South Korea and the United States without specifying details.

The North’s reaction followed the South holding a live-fire artillery exercise near the maritime border in the West Sea.

Earlier, North Korea threatened to launch “self-defensive strikes” against the South if the latter carried out the artillery drill.

[BRVoice]

http://www.usfk.mil/usfk/news.2nd.in...t.vehicles.729


2nd Infantry Division issued new combat vehicles
By Eighth Army Public Affairs


YONGSAN GARRISON, South Korea — Units of the 2nd Infantry Division will receive new M1A2 Abrams Tanks and M2A2 Bradley Fighting Vehicles from December 2010 to May 2011.

The new vehicles are an upgrade to the current fleet of 2nd I.D.’s combat vehicles in South Korea. The new vehicles are fitted with improved tracking systems, fire control systems, and improved armor that better equips the 2nd Infantry Division for the battlefield of the 21st century.

“While this is not an increase in the number of U.S. combat vehicles on the Korean Peninsula,” said Lt. Gen. John D. Johnson, 8th Army commander. “It is a significant increase in combat capability.”

“Our Soldiers will be equipped with the most advanced tank in the world,” added Johnson. “We owe it to our Soldiers to provide them with the best equipment available.”

This type of operation is a routine force modernization process for the U.S. Army. The older vehicles will be shipped back to the U.S. to be completely refurbished.

“This is part of the Army’s modernization plan,” said Johnson. “It will keep our forces at the highest level of readiness.”

“It is also a key indicator of the importance our Army places on troops here in Korea,” he said.

[BRVoice]

http://twitter.com/W7VOA

#ROK naval exercise confirmed as underway in east sea. It'll last 3 days. #Koreas about 6 hours ago via TweetDeck

[BRVoice]

http://www.reuters.com/article/idUST...ontent=Twitter


South Korea army to hold huge drill, North silent
By Jack Kim and Sylvia Westall

SEOUL | Wed Dec 22, 2010 1:52am EST

SEOUL (Reuters) - South Korea announced land and sea military exercises on Wednesday including its largest-ever live-fire drill near North Korea just as tension on the peninsula was beginning to ease after Pyongyang's attack on a southern island.

The land drill, involving artillery, fighter jets and the largest number of personnel in a peace-time exercise, will take place on Thursday, after the South's live-fire artillery exercise on Monday on the island of Yeonpyeong, and is bound to infuriate the North.

"We'll be sure to deal a punishing blow if the North tries to repeat the kind of situation like the artillery shelling of Yeonpyeong," Brigadier General Ju Eun-shik said in a statement.

There was no immediate reaction from Pyongyang, with the local KCNA agency running stories about leader Kim Jong-il's visit to a power station.

South Korea is also holding three days of live-firing naval drills off the peninsula's east coast starting on Wednesday, a media official at the Defense Ministry said.

He would not provide details. Yonhap news agency said the drills were taking place 100 km (60 miles) south of the maritime border with North Korea and involved at least six naval boats.

North Korea this week offered to re-admit U.N. inspectors concerned about its nuclear-weapon programme, leading to speculation of a resumption of six-party disarmament talks and a general sigh of relief around the world that the crisis had passed.

"Yes, it will be a show of force against that," an army officer said when asked if the shelling of Yeonpyeong last month was a factor in the land drill's planning.

He said similar drills had been staged previously on more than 50 occasions, but the scale this time was unprecedented.

"The scale of mechanized assets taking place is enormous. When we would normally have 6 K-9 mechanized artillery, we'll have 36. We'll have the F-15 jets firing. We'll have choppers. You can say most of the mechanized assets taking part will be firing live ammunition."

It will take place in Pocheon region, less than 50 km (30 miles) north of downtown Seoul.

The latest crisis peaked when North Korea shelled Yeonpyeong, just south of the disputed maritime border, killing four people -- including two civilians -- in the worst attack on South Korean territory since the end of the civil war in 1953.

South Korean President Lee Myung-bak has suffered widespread domestic criticism for his response to North Korean attacks, with critics saying he was indecisive and failed to keep the public informed.

The South carried out live-fire drills on Yeonpyeong on Monday, which provoked only a verbal reaction from the North. It had vowed to strike back if the South went ahead with the drills, prompting fears of all-out war.

China, North Korea's only major ally, has urged dialogue to resolve the crisis and urged Pyongyang to follow through on its offer to allow U.N. inspectors into the country.

The Chinese Foreign Ministry had no immediate comment on the planned drill.

FAMILY RULE

Analysts say the North is unlikely to undertake another act of aggression like this year's attack on South Korea's Cheonan warship, blamed on the North by the United States and the South, and the Yeonpyeong shelling, at least not in the near term.

Its most likely next move would be to conduct live-fire artillery drills or possibly a short-range missile test into its waters off the west coast.

Analysts have said its recent militaristic acts have served to bolster family rule as ailing leader Kim Jong-il grooms his youngest son, Kim Jong-un, as his successor.

"North Korea likes to step toward the brink and then away from it again," said Brian Myers, an expert on the North at South Korea's Dongseo University.

"The news from Pyongyang in the past few days indicates that the Kim Jong-il regime is now in the backing-off part of its usual cycle."

He said the North probably did not expect the South to carry through with live-fire exercises on Monday.

"If it had, it would not have made such loud threats of reprisal in its domestic media. After the exercises took place, the Kim regime had to tell its own people that the South's 'provocation' was not worth responding to, a flip-flop it cannot afford to repeat in just a few days. I don't expect the North to be quite as vocal about the next round of exercises."

South Korean Finance Minister Yoon Jeung-hyun, speaking before the announcement of the drill, said domestic financial markets had weathered the crisis and the South Korean economy, Asia's fourth-largest, stayed on a growth track.

But he warned that the tension could still dent consumer spending with a key sentiment measure due on Friday.

South Korean markets were unaffected by the tensions with foreign investors buying into stocks and bond futures. Traders said earlier that the won currency was generally being affected more by concern over the euro zone.

Consumers and businesses in South Korea say they have lived with tension on the divided peninsula for years and markets do not always react although the recent crisis had rattled global markets and remained an underlying risk.

(Additonal reporting by Yoo Choonsik; Editing by Nick Macfie)

[Toad]

I think the South is now pissed off enough they're purposefully turning the tables and seeing if the North can take what they usually dish out. Defiance.