North Korea's young dictator-in-waiting has burnished his leadership credentials by launching a deadly artillery raid on South Korean territory, causing Seoul to scramble F16 jet fighters and return fire.
Two South Korean marines were killed and at least 15 people were wounded as shells rained down on Yeonpyeong island, off the north-west coast of South Korea.
Hundreds of terrified residents huddled in bunkers or fled by boat as buildings and trees went up in flames and smoke billowed above the island.
The attack occurred half way between Seoul and the Yellow Sea location where 46 South Korean sailors were sunk in a torpedo attack in March.
Seoul returned fire with 80 shells and scrambled fighter jets over the island. It also put its military on the highest alert level as President Lee Myung-bak ordered officials to ''respond sternly'' but to avoid aggravating the situation.
Pyongyang last night claimed Seoul had fired first. ''The South Korean enemy, despite our repeated warnings, committed reckless military provocations of firing artillery shells into our maritime territory,'' the North's military command said.
It said the North would ''continue to make merciless military attacks with no hesitation if the South Korean enemy dares to invade our sea territory by 0.001 mm. It is our military's traditional response to quell provocative actions with a merciless thunderbolt''.
The attack added to fears set off last week when the North revealed a previously unknown uranium enrichment facility.
The attack on the island drew international condemnation and prompted plans for an emergency session of the United Nations Security Council.
Washington called on North Korea to ''halt its belligerent action'' and ''fully abide'' by the armistice deal that ended the 1950-53 Korean War.
''The United States is firmly committed to the defence of our ally, the Republic of [South] Korea, and to the maintenance of regional peace and stability.''
In Japan, which has long had difficult relations with the reclusive state, Prime Minister Naoto Kan ordered his government to prepare for any eventuality.
In Canberra, Prime Minister Julia Gillard expressed ''grave concern at this dangerous provocation by North Korea'' and said the government was consulting with South Korea, Japan and the US over the situation.
Foreign Minister Kevin Rudd also expressed fear. ''This is bad for the stability and security of the region,'' he told Sky News.
China, Pyongyang's only major ally, urged a resumption of six-nation talks aimed at ending the North's nuclear program. ''We express concern over the situation,'' a foreign ministry spokesman said. ''It is China's consistent and firm position to realise de-nuclearisation on the [Korean] peninsula through dialogue and consultation.''
Zhang Liangui, a North Korea expert at Beijing's Central Party School, told The Age that Kim Jong-un, 26-year-old son of dictator Kim Jong-il and his anointed successor, was deliberately destabilising his environment to mobilise the military and consolidate his power. There have been previous skirmishes along the border but the stakes are getting higher.
Yesterday's exchange comes days after North Korea revealed the existence of a uranium enrichment facility to an American scientist. Siegfried Hecker told The New York Times he was ''stunned'' by the plant's sophistication, which North Korea said was operating 2000 centrifuges.
If verified, this would take Pyongyang towards building far more powerful warheads than the eight to 12 plutonium-based warheads it is estimated to have built over the past five years.
Stephen Bosworth, the US Special Representative for North Korea, arrived in China last night to brief officials on Pyongyang's new enrichment facilities.
North Korea is believed to lack technology to shrink warheads and deliver them accurately, but it still has one of the world's largest concentrations of conventional weapons lined along the 38th parallel.
While China does not support Pyongyang's nuclear program, it has repeatedly sheltered it from international punishment and allegedly failed to strictly enforce anti-proliferation measures. China has twice hosted Kim Jong-il this year and generally pushed for closer ties.
North Korea's behaviour will be an embarrassment for China as President Hu Jintao prepares to visit Washington in January, the first official head of state visit since 1997.
Professor Zhang said the latest episode was unlikely to escalate because the North was mainly ''venting anger''. He said it wanted concessions from Seoul and recognition from the global community.
North Korea does not recognise the border unilaterally drawn by the UN at the close of the Korean War. The two Koreas have fought three bloody skirmishes near the maritime border in recent years.