North Korea has reportedly fired shells into the disputed western maritime border near a South Korean high-speed patrol boat in the Yellow Sea, the South Korean Defence Ministry has said.
The ministry was quoted by Agence-France Presse news agency as saying: "The shells fell near our ship, which has been on regular patrol in our territory, but it did not cause any damage to our ship."
The shells landed about 200m away from the vessel, the ministry claimed. Reports of whether artillery was fired from sea or land remained unidentified.
As a counter strike, South Korean forces also fired several shells into northern waters, local news sources reported.
Residents on Yeonpyeong were being moved to bomb shelters, local television network YTN reported.
North Korea has denied the accusations, describing them as 'sheer fabrication'.
North Korea's Western Front Command said in a statement: "The verified fact is that the puppet navy vessel, which intruded deeply into our waters under the pretence of controlling Chinese fishing boats, fired recklessly and lied that we had fired first.
"All the troops under the Western Front Command are well prepared to crush ruthlessly the aggravating provocative acts by the puppet military gangsters in the name of all the people."