The Key Resolve/Foal Eagle drills are the first to be held since the North`s deadly artillery attack on a South Korean border island last November.
The US and South Korea said the exercise is defensive in nature but North Korea habitually denounces it as a rehearsal for invasion.
"If the aggressors launch provocation for a `local war` the world will witness unprecedented all-out counteraction on the part of the army and people of the DPRK (North Korea)," its military said Sunday.
"It will also see such merciless counteraction as engulfing Seoul in sea of flames, whereby to smash every move for confrontation with unimaginable strategy and tactics."
The North routinely issues such warnings before military drills in the South. But tensions are high after the shelling attack that killed two marines and two civilians.
The South also accuses its neighbour of torpedoing a warship near the disputed Yellow Sea border in March 2010 with the loss of 46 lives, a charge it denies.
Analysts say the North`s regime is also trying to block news of popular revolts that have swept away despotic regimes in North Africa.
The South`s military has been floating balloons into the North carrying news of the uprisings, a lawmaker said last week. Private activists also frequently launch propaganda leaflets that are suspended under the balloons.
On Sunday the North`s military threatened to open fire at sites from where "rotten videos" and other propaganda material are launched.
The drills involve 12,300 US troops and some 200,000 service members including reservists from South Korea, military officials from the two sides say.
There have been widespread media reports that a US aircraft carrier will take part but neither side would confirm this.
The US has 28,500 troops based in the South. A US military spokesman said the drills, which began Monday do not involve any extra activities on five frontline islands near the Yellow Sea border.
The 11-day Key Resolve drill focuses on computer-based simulations. The Foal Eagle exercise involves field training that will continue through April 30. (*)
Editor: Kunto Wibisono
Copyright © ANTARA 2011
