INCHEON, South Korea — North and South Korea exchanged artillery fire Tuesday along their disputed frontier, raising tensions between the rivals to their highest level in more than a decade. The communist nation warned of more military strikes if the South encroaches on the maritime border by "even 0.0001 millimeter."
Angry at South Korea's refusal to halt military drills near their sea border, North Korea shelled the island of Yeonpyeong, and Seoul responded by unleashing its own barrage from K-9 155mm self-propelled howitzers and scrambling fighter jets. Two South Korean marines were killed in the shelling that also injured 15 troops and three civilians.
Officials in Seoul said there could be considerable North Korean casualties.
The confrontation lasted about an hour and left the uneasiest of calms, with each side threatening further bombardments.
North Korea's apparent progress in its nuclear weapons program and its preparations for handing power to a new generation have plunged relations on the heavily militarized peninsula to new lows in recent weeks.
South Korea's military was put on high alert after the shelling — one of the rivals' most dramatic confrontations since an armistice halted the Korean War in 1953 and one of the few to put civilians at risk.
"I thought I would die," said Lee Chun-ok, 54, an islander who said she was watching TV in her home when the shelling began. Suddenly, a wall and door collapsed.
"I was really, really terrified," she told The Associated Press after being evacuated to the port city of Incheon, west of Seoul, "and I'm still terrified."
The attacks focused global attention on the tiny island and sent stock prices down sharply worldwide. The dollar, U.S. Treasury prices and gold all rose as investors sought safe places to park money. Hong Kong's main stock index sank 2.7 percent, while European and U.S. stock indexes fell between 1 and 2 percent. The Dow Jones industrial average fell 165 points, or 1.5 percent, in afternoon trading.
South Korean President Lee Myung-bak, who convened an emergency security meeting shortly after the initial bombardment, said an "indiscriminate attack on civilians can never be tolerated."
"Enormous retaliation should be made to the extent that (North Korea) cannot make provocations again," he said.
The United States, which has more than 28,000 troops stationed in South Korea, condemned the attack. The White House said President Barack Obama was "outraged" by North Korea's actions.
Top national security aides planned to meet later Tuesday to discuss the situation. The White House said it would work with its international partners to determine the appropriate next steps.
Gen. Walter Sharp, commander of U.S. forces in South Korea and the U.S.-led U.N. Command, said in a Facebook posting that the U.S. military is "closely monitoring the situation and exchanging information with our (South Korean) allies as we always do."
China, the North's economic and political benefactor, which also maintains close commercial ties to the South, appealed for both sides to remain calm and "to do more to contribute to peace and stability on the peninsula," Foreign Ministry spokesman Hong Lei said.
U.N. Secretary-General Ban Ki-moon condemned North Korea's artillery attack, calling it "one of the gravest incidents since the end of the Korean War," his spokesman Martin Nesirky said. Ban called for "immediate restraint" and insisted "any differences should be resolved by peaceful means and dialogue," the spokesman said.
The clash "brings us one step closer to the brink of war," said Peter Beck, a research fellow with the Council on Foreign Relations, "because I don't think the North would seek war by intention, but war by accident, something spiraling out of control has always been my fear."
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