SEOUL — South and North Korea traded artillery fire across their heavily militariZed border on Thursday, in a rare exchange that left no casualties but pushed already elevated cross-border tensions to dangerously high levels.

North Korea followed up with an ultimatum sent via military hotline that gave the South 48 hours to dismantle loudspeakers blasting propaganda messages across the border or face further military action.

The South's defense ministry dismissed the threat and said the broadcasts would continue.

Direct exchanges of fire across the inter-Korean land border are extremely rare, mainly, analysts say, because both sides recognize the risk for a sudden and potentially disastrous escalation between two countries that technically remain at war.

Thursday's incident came amid heightened tensions following mine blasts that maimed two members of a South Korean border patrol earlier this month and the launch this week of a major South Korea-US military exercise that infuriated Pyongyang.

In a detailed press briefing later in the day, the South's defense ministry said the nuclear-armed North initially fired a single artillery round over the border shortly before 4:00pm (0700 GMT).

Propaganda Targets?

Minutes later it fired several more in the rough direction of one of the South's loudspeaker units, but the shells fell short on the South's side of the demilitarized zone (DMZ) — a four kilometer-wide buffer area straddling the actual frontier line.

The South Korean military retaliated by firing "dozens of rounds of 155mm shells" which the ministry said were also aimed to land in the North's section of the DMZ.

As a preventive measure, local South Korean residents in Yeoncheon county some 60 kilometer north of Seoul were ordered to evacuate their homes for nearby shelters.

South Korean troops were placed on maximum alert, while President Park Geun-Hye chaired an emergency meeting of her National Security Council and ordered a "stern response" to any further provocations.

Dan Pinkston, Korea expert at the International Crisis Group in Seoul, said the situation left both sides locked in a dangerous standoff.

The North's decision to lob shells over the border was surprising, "because the inherent risks are just so big", Pinkston said.

"If they had hit something strategic or caused any casualties, the South's response would have been far stronger, and then suddenly we're on the path towards a serious confrontation," he added.

Elevated Tensions

The incident fueled tensions that have been on high simmer in recent weeks following the border landmine incident.

Seoul said the mines were placed by North Korea and responded by resuming high-decibel propaganda broadcasts across the border, using loudspeakers that had lain silent for more than a decade.

The North denied any role and threatened "indiscriminate" shelling of the loudspeaker units.

It also vowed retaliatory strikes after Seoul and Washington refused to call off their annual Ulchi Freedom military drill, which kicked off Monday and role plays responses to a full-scale North Korean invasion.

Pyongyang regularly ups its bellicose rhetoric before and during the annual joint exercises, but rarely follows through on its threats.

In the past, its default response has been to test fire missiles into the East Sea (Sea of Japan).

The last direct attack on the South was in November 2010 when North Korea shelled the South Korean border island of Yeonpyeong, killing two civilians and two soldiers.

On that occasion, South Korea responded by shelling North Korean positions, triggering brief fears of a full-scale conflict.

In October last year, North Korea border guards attempted to shoot down some helium balloons launched across the land border by activists and carrying thousands of anti-North leaflets.

The incident triggered a brief exchange of heavy machine-gun fire and scuppered a planned resumption of high-level talks.