South Korean troops on Monday began a live-fire artillery exercise near the disputed Yellow Sea border with North Korea despite the North's threats of 'merciless' retaliation, officials said.

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 it would last one to two hours.

Military officials said the routine drill, their second this year, would involve self-propelled howitzers, Vulcan cannon, mortars and Cobra attack helicopters.

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

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 said that attack was in retaliation for a live-fire exercise which dropped shells into waters which Pyongyang considers part of its maritime territory.

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.

Early Monday, Pyongyang repeated threats of retaliation.

"If the puppet warmongers preempt reckless firing despite our warning, they will not escape punishment thousands-fold severer than the past Yeonpyeong Island shelling," said a statement.

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 South's military 'is fully ready for any kind of situation', a spokesman said.

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."

The US and South Korean navies are scheduled to stage a separate joint anti-submarine drill further to the south in the Yellow Sea from Monday to Friday.

A major annual US-South Korean drill known as Key Resolve will start on February 27 and continue until March 9. And a joint air, ground and naval field training exercise will be held from March 1 to April 30.

North Korea has denounced the exercises as a rehearsal for invasion. Paik said the North may tolerate the joint military drills. But Monday's live-fire exercise 'is staged solely by the South and will be perceived 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."

The North's ruling party separately announced it will hold a special conference in April to 'glorify' late leader Kim and rally around Jong-Un.

Paik said the meeting was expected to formally appoint the son as head of the ruling Workers' Party, putting him firmly in power.