South Korean propaganda leaflets may spark war, Pyongyang warns

North Korea said yesterday its relations with South Korea had been driven into a "catastrophic" phase again, and warned the scattering of anti-Pyongyang leaflets could spark a war.

The statement came hours after Pyongyang's foreign ministry said the North would bolster its "war deterrent", and accused the United States of deliberately escalating tension through its ongoing military drills with the South.

Earlier, North Korea's military condemned the South Korean navy's seizure of a Northern fishing boat near the sea boundary as a "grave provocation" and threatened to retaliate.

South Korea handed back the boat, which was captured with three sailors on board near the disputed Yellow Sea border late on Thursday.

"North-South relations have been driven into a catastrophic phase again due to the South Korean authorities' frantic scattering of anti-DPRK [North Korea] leaflets", said a spokesman for the North's high-level delegation to the South.

"The leaflet scattering operation and smear campaign going beyond the tolerance limit are undisguised acts of declaring a war," he said.

The North's Committee for Peaceful Reunification of Korea said on Wednesday that the South's military scattered leaflets denouncing its regime and leader Kim Jong-un, by using balloons floated from islands near the border in the Yellow Sea.