North Korea shells South in fiercest attack in decades

SEOUL (Reuters) - North Korea on Tuesday fired dozens of artillery shells at a South Korean island, killing two soldiers and setting dozens of houses ablaze, in one of the heaviest attacks on its neighbour since the Korean War ended in 1953.
South Koreans watch the news on television showing smoke rising from Yeonpyeong Island after it was hit by dozens of artillery shells fired by North Korea, at Seoul railway station November 23, 2010. (REUTERS/Truth Lee)

The attack comes as the reclusive state has been pressing regional powers to return to negotiations about its nuclear weapons programme and follows revelations at the weekend it is fast developing another source of material to make atomic bombs.

It also follows moves by iron leader Kim Jong-il to make his youngest son heir apparent to the family dynasty.

For decades, the Korean leadership has played a carefully calibrated game of provocations to win concessions from the international community and impress his own military. The risk is that the leadership transition has upset this balance and that events spin out of control.

South Korean President Lee Myung-bak, who has pursued a hard line with the reclusive North since taking office nearly three years ago, said a response had to be firm following the attack on Yeonpyeong island, just 120 km (75 miles) west of Seoul.

The two Koreas are still technically at war -- the Korean War ended only with a truce -- and tension rose sharply early this year after Seoul accused the North of torpedoing one of its navy vessels, killing 46 sailors.

"Houses and mountains are on fire and people are evacuating. You can't see very well because of plumes of smoke," a witness on the island told YTN Television before the shelling ended after about an hour.

China, the impoverished North's only powerful ally, was careful to avoid taking sides, calling on both Koreas to "do more to contribute to peace".

"China hopes that the relevant parties will do more to contribute to peace and stability in the region ... it is imperative now to resume the six-party talks," a spokesman for the Chinese Foreign Ministry, Hong Lei, told reporters.

Those talks on North Korea's nuclear weapons programme -- involving the two Koreas, China, Japan, Russia and the United States -- have long been on ice.

However, the reclusive North has more recently been pushing to resume the talks, which previously it has used to win massive aid in return for promises to end its weapons programme.

AT LEAST 200 SHELLS

YTN said at least 200 North Korean shells hit Yeonpyeong, which lies off the west coast of the divided peninsula near a disputed maritime border. Most landed on a military base there.

South Korea's military said two soldiers were killed in the attack, 17 were wounded and three civilians were also hurt. South Korean military returned the fire and sent a jet fighter to the area.

YTN showed pictures of plumes of smoke pouring from the island and quoted a witness as saying fires were burning out of control.

WON TUMBLES

News of the exchange of fire sent the won tumbling in offshore markets with the 1-month won down about four percent in NDF trading. U.S. 10-year Treasury futures rose and the Japanese yen fell.

It also rattled global markets, already unsettled by Ireland's debt problems and worries about riskier markets.

The South Korean central bank is holding an emergency meeting to assess the possible market impact of the shelling.

The attack comes just as a U.S. envoy is in Beijing on a tour of the region and is expected to ask China to use its influence to help tame North Korea.

Washington has branded the North a danger to the region and expressed concern Pyongyang would sell nuclear weapons technology to other states. It has said it was ready to return to talks but wants to see more commitment to denuclearisation by the North beforehand.

The White House condemned the attack, telling the North to halt its "belligerent action" and saying it was committed to defend the South.

It has about 28,000 troops in South Korea, their combined forces facing an estimated one million North Korean soldiers who make up one of the world's biggest standing armies.

"UNBELIEVABLE"

"It's unbelievable," said Zhu Feng, professor of international relations at Peking University. "Today's news proves that North Korea, under unprovoked conditions, shot these South Korean islands. It's reckless provocation. They want to make a big bang and force the negotiations back into their favour. It's the oldest trick."

The North depends heavily on China for economic and diplomatic support and its leader, Kim Jong-il, has visited China twice this year, in part to gain backing for the anointment of his son as heir.

Those ties have become a sore-point with Washington after reports that North Korea appears to have made big steps towards enriching uranium, possibly using technology that passed through or even originated in China. [ID:nLDE6AL11O]

China has urged returning to the nuclear disarmament negotiations but has also fended off calls from the U.S. and its regional allies to use its vital food and energy aid to North Korea as a lever.