Residents of the two islands were ordered to evacuate to shelters and ferrieswere suspended amid one of the most serious military escalations on thepeninsula since Pyongyang fired shells at one of the islands in 2010.
North Korea's military said it had conducted a naval live-fire drill as a"natural countermeasure" against South Korean threats, according to astatement on the official Korean Central News Agency.
Seoul's defence ministry said the rival military fired more than 200 roundsof artillery shells near Yeonpyeong and Baengnyeong, two sparsely populatedislands situated just south of a defacto maritime border between the twosides, reports BSS.
It said the shells landed in a buffer zone created under a 2018 tension-reducing deal, which fell apart in November after the North launched a spysatellite.
Resuming artillery fire in the buffer zone "is a provocative act thatthreatens peace on the Korean Peninsula and escalates tensions", Seoul'sdefence minister Shin Won-sik said.
In response, Seoul's military will take "immediate, strong, and finalretaliation -- we must back peace with overwhelming force", he added.
North Korea's military warned Seoul should not commit "a provocation underthe pretext of so-called counteraction", according to KCNA. It threatened theNorth would "show tough counteraction on an unprecedented level".
It said the shells fired did not even have "an indirect effect" onBaengnyeong and Yeonpyeong.
Pyongyang's major ally and benefactor China called for "restraint" from allsides.
- Evacuation orders -
Yeonpyeong, which has around 2,000 residents, is about 115 kilometres (70miles) west of Seoul. Baengnyeong, with a population of 4,900, is about 210kilometres west of Seoul.
Local officials said residents had been told to evacuate to shelters as a"preventative measure" ahead of the South Korean military drill. The orderwas lifted hours later, South Korea's Yonhap news agency reported.
One resident of the island said they were "shaking in fear" at the barrage.
"At first I thought it was the shells fired by our own military... but wastold later it was by North Korea," Kim Jin-soo, a Baengnyeong resident toldlocal broadcaster YTN.
In November, Seoul partially suspended the 2018 military accord to protestPyongyang's putting a spy satellite into orbit. The North then scrapped thedeal completely.
"The nullification of the (accord) increases the possibility of militaryclashes in the border areas," Yang Moo-jin, president of the University ofNorth Korean Studies in Seoul, told AFP.
He added that "the evacuation of our residents raises psychological andsecurity concerns, which can ultimately destabilise the economy of SouthKorea".
- 2010 clash -
In 2010, in response to a South Korean live-fire drill near the sea border,the North bombarded Yeonpyeong island killing four South Koreans -- twosoldiers and two civilians.
That was the first attack on a civilian area since the 1950-53 Korean War.
South Korea returned fire an exchange which lastedmore than an hour, as thetwo sides traded more than 200 shells, sparking brief fears of a full-fledgedwar.
Relations between the two Koreas are at one of their lowest points indecades, after the North's leader Kim Jong-Un enshrined the country's statusas a nuclear power into the constitution while test-firing several advancedinter-continental ballistic missiles.
At year-end policy meetings, Kim warned of a nuclear attack on the South andcalled for a build-up of the country's military arsenal, warning thatconflict could "break out any time".
To deter Pyongyang, the United States deployed a nuclear-powered submarine inthe South Korean port city of Busan and flew long-range bombers in drillswith the South and Japan.
North Korea described the deployments as "intentional nuclear war provocativemoves".
On Friday, KCNA said Kim called for the ramping-up of missile launcherproduction "given the prevailing grave situation that requires the country tobe more firmly prepared for a military showdown with the enemy."
His comments came after the White House accused North Korea of providingRussia with ballistic missiles and missile launchers that were used in recentattacks on Ukraine. Washingon has called this a escalation of Pyongyang'ssupport for Moscow.