"We will take military countermeasures," the North's chief delegate to inter-Korean military talks, Lieutenant General Kim Yong-Chol, was quoted as saying by Yonhap news agency in a notice sent to the South.

There was no official response to the comments. Media reports said the North's powerful military might close the border to cut off exchanges.

The communist state had demanded an apology for remarks made last week by South Korea's new chairman of the Joint Chiefs of Staff (JCS), General Kim Tae-Young. It interpreted these as hinting at a preemptive military strike.

Seoul's defence ministry on Wednesday rejected the apology demand and urged the North to stop raising tensions.

"The South's reply made yesterday was nothing but shenanigans," Kim Yong-Chol was quoted as saying by Yonhap.

A defence ministry spokesman confirmed that a message had been received from the North but declined to specify the contents.

"It is not yet clear what the North meant by military countermeasures. Related agencies are now analysing its contents," a senior government official was quoted as saying on the website of Seoul's Dong-A Ilbo newspaper.

Some officials said Pyongyang may halt all exchanges with Seoul, according to Dong-A. The military controls border crossings.

South Korean President Lee Myung-Bak, a conservative who took office February 25, has angered the North by adopting a tougher line on relations after a decade-long "sunshine" engagement policy under liberal presidents.

He says he will link economic aid to the North's progress in nuclear disarmament and will raise its widely-criticised human rights policy.

Lee on Thursday urged the North to hold "straightforward" talks to calm the atmosphere.

"Since my inauguration, North Korea has intensified tension. But I think relations will not worsen," Lee said in his first comments since Pyongyang earlier this week labelled him a traitor and US sycophant.

"What the new government wants is a more straightforward dialogue between South and North Korea ... we want North Korea to open its mind for sincere dialogue."

The flare-up began March 27, when the North expelled South Korean officials from a joint industrial complex in protest at Lee's harder line. The next day, it test-fired missiles and accused Seoul of breaching a disputed sea border.

Over the weekend, the military demanded an apology for the remarks by the JCS chief and said it would cut off all dialogue if none was forthcoming.

Official media threatened to turn the South into "ashes" should any preemptive strike was launched.

The JCS chief Kim reportedly told parliament last week, in answer to a question, that Seoul would strike North Korean nuclear facilities if the communist state showed signs of attacking the South with nuclear weapons.

"What JSC chief Kim said is seen as a natural and ordinary reply," Lee said Thursday. "It shouldn't be interpreted differently. So North Korea's attitude is not desirable."

On Tuesday, the North launched a barrage of insults against Lee, the first such attack since he took office. In a new attack on Thursday, the North accused his government of pushing relations towards "catastrophe."

"South Korea's conservative regime is driving north-south relations to confrontation and catastrophe, blatantly swimming against the trend of the era of independence, reunification, peace and prosperity," a spokesman for the Democratic Front for the Reunification of the Fatherland said in a statement.

Yonhap quoted the statement by the official anti-Seoul propaganda organisation, which it said was aired repeatedly by state broadcasters.

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