SEOUL, South Korea - Military tension on the Korean peninsula rose Thursday after North Korea threatened to attack any South Korean ships entering its waters, and Seoul held antisubmarine drills in response to the March sinking of a navy vessel blamed on Pyongyang.

Separately, the chief U.S. military commander in South Korea criticized the North over the sinking of the South Korean warship Cheonan in which 46 sailors died, telling the communist country to stop its aggressive actions.

North Korean reaction was swift. The military declared it would scrap accords with the South designed to prevent armed clashes at their maritime border - including the cutting of a military hotline - and warned of "prompt physical strikes" if any South Korean ships entered what the North says are its waters in a disputed area off the west coast of the peninsula.

A multinational team of investigators said May 20 that a North Korean torpedo sank the 1,200-ton ship. Seoul announced punitive measures, including slashing trade and resuming anti-Pyongyang propaganda over radio and loudspeakers aimed at the North.

North Korea has denied attacking the ship, which sank near disputed western waters where the Koreas have fought three sea battles since 1999.

Inter-Korean political and economic ties have been steadily deteriorating since the February 2008 inauguration of South Korean President Lee Myung Bak, who vowed a tougher line on the North and its nuclear program. The sinking of the Cheonan has returned military tensions - and the prospect of armed conflict - to the forefront.

Off the west coast, 10 South Korean warships, including a 3,500-ton destroyer, fired artillery and other guns and dropped antisubmarine bombs during a one-day exercise to boost readiness, the navy said.

South Korea also plans two major military drills with the United States by July in a display of force intended to deter aggression by North Korea, according to South Korea's Joint Chiefs of Staff.

Gen. Walter Sharp, chief of the 28,500 U.S. troops in South Korea, said the United States, South Korea, and other members of the U.N. Command "call on North Korea to cease all acts of provocation and to live up with the terms of past agreements, including the armistice agreement."

The prospect of another eruption of serious fighting has been constant since the war ended. But it had been largely out of focus in the last decade, as North and South Korea took steps to end enmity and distrust, such as launching joint economic projects and holding two summits.

The sinking clearly caught South Korea - which has a far more modern and advanced military than its impoverished rival - off guard. The South and the U.S. military are now taking pains to warn the North that such an embarrassment will not happen again.

South Korean media reported Thursday that the U.S.-South Korean combined forces led by Sharp raised its surveillance level, called Watch Condition, by a step from level 3 to level 2. Level 1 is the highest.

The increased alert level means U.S. spy satellites and U-2 spy planes would intensify reconnaissance of North Korea, the JoongAng Ilbo newspaper reported, citing an unidentified South Korean official.

Despite the tensions, most analysts feel the prospect of war remains remote because North Korea knows what is at stake. "If it's all-out war, then I'm convinced it would mean the absolute destruction" of North Korea, said Daniel Pinkston, a Seoul-based analyst.