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North Korea fired dozens of artillery shells onto a South Korean island on Monday, killing one person and triggering an exchange of fire as South Korean armed forces went on their highest state of alert.
South Korean troops retaliated cannon fire and scrambled air force jets.
The firing came after North Korea's disclosure of an operational uranium enrichment programme -- a second potential way of building a nuclear bomb -- which is causing serious alarm for the United States and its allies.
The move prompted US special representative for North Korea, Stephen Bosworth, to rule out the resumption of six-party talks on nuclear disarmament that Pyongyang abandoned two years ago, the BBC said in a report.
Some 50 North Korean shells landed on the South Korean border island of Yeonpyeong near the tense Yellow Sea border, damaging dozens of houses and sending plumes of thick smoke into the air, YTN television reported.
One South Korean marine -- part of a contingent based permanently on Yeonpyeong -- was killed and 13 other marines were wounded, the military said. YTN said two civilians were also hurt.
"A Class-A military alert issued for battle situations has been imposed immediately," the spokesman said.
Yeonpyeong lies just south of the border declared by United Nations forces after the inconclusive war six decades ago, but north of the sea border declared by Pyongyang.
Tensions between the two nations have been high since the sinking of a South Korean warship in March, which Seoul said was the result of a North Korean torpedo attack. Pyongyang has rejected this charge.
North and South Korean troops exchanged gunfire across their border, stoking tensions in the buildup to the G20 summit of world leaders in Seoul in November.