South Korea began a nation-wide naval drill using live-ammunition on Monday, disregarding Pyongyang’s threats, cautioning against provocative exercises in the disputed waters.

The South declared that the exercises were scheduled to be conducted near the Northern Limit Line, but away from Yeonpyeong island where the two states exchanged fire thirteen days ago.

North Korea said the drills showed that Seoul was “hell-bent” on starting a war.

US Secretary of State Hillary Clinton is to host talks with her Japanese and South Korean counterparts Monday to discuss North Korea. China, which has persistently called for wider negotiations, was not invited.

On Sunday, the North's Korean Central News Agency (KCNA), a state run bureau, said "frantic provocations ... are rapidly driving the situation on the Korean Peninsula to an uncontrollable extreme phase. No one can predict to what extent the situation will deteriorate in the future."

It added that “the DPRK is now maintaining a maximum self-possession and self-control.”

In telephone talks with US President Barack Obama, Chinese President Hu Jintao called for a “cool and rational” response from all parties involved in the Korean peninsula crisis.

"Under the current situation, it is imperative that the response is cool and rational and that we firmly prevent a deterioration of the situation," the foreign ministry quoted Hu as saying.

"Under the current situation, it is very possible that tensions on the Korean peninsula could further escalate and get out of control if not properly handled," the Chinese president added.

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