North Korea threatened Thursday to launch "a sacred war" against South Korea if attacked, just hours after the South launched massive air and ground firing drills near the countries' heavily fortified border.

Defence chief Kim Yong Chun said North Korea is "fully prepared to launch a sacred war" — and would use its nuclear capabilities — if attacked, according to the official Korean Central News Agency.

He also warned the South against intruding even the smallest amount on its territory, the agency reported.

At least 800 South Korean soldiers took part in Thursday's drills, held at a firing range in the foggy, mountainous Pocheon about 30 kilometres from the Koreas' border.

Tanks, artillery, rocket launchers and fighter planes shot live rounds during the drills, which were meant to show off the range of weaponry at the military's disposal.

The boom of cannons echoed through the valley and the hills erupted in smoke. Rockets streamed through the air and slammed into the side of a hill as helicopters overhead fired at targets and F-15 jet fighters dropped bombs.

Tension in Seoul lessens

Members of the public were invited to watch the 45-minute drills, according to Kevin Kim, reporting from Seoul. Kim also said the drills were more of "a media event" than a dramatic signal that tension between the two countries is escalating.

South Korean President Lee Myung-bak said his country needs 'a strong response' to North Korea in order to 'safeguard peace, deter aggression and prevent a war.' (Reuters)

"The level of tension that's felt here in Seoul is considerably lower than earlier this week and people in Seoul are carrying on as normal," Kim told CBC News.

During a separate visit to a front-line army base near the Korea's eastern land border, President Lee Myung-bak vowed a strong response to any new attacks by North Korea.

"I had thought that we could safeguard peace if we had patience, but that wasn't the case," Lee told troops, according to his office. "Now we should have a strong response to [North Korea's provocations], so that we can safeguard peace, deter aggression and prevent a war."

Thursday's manoeuvres took place exactly a month after a routine South Korean live-fire drills from Yeonpyeong Island in the Yellow Sea triggered a shower of North Korean artillery that killed two marines and two construction workers.

The Nov. 23 military attack was the first on a civilian area since the 1950-53 Korean War ended in a truce.

With files from The Associated Press