SEOUL: South Korea urged the North Sunday to end its military provocations but Pyongyang threatened Seoul with the "severest punishment" over massive joint war games planned with the United States.

The rivals exchanged tit-for-tat warnings as the South unveiled a roadmap for the reunification of the Korean peninsula on the eve of the 10-day exercise involving some 56,000 South Korean and 30,000 American soldiers.

"It is about time Pyongyang looked straight at reality, made a courageous change and came up with a drastic decision," South Korea`s President Lee Myung-Bak said.

The Koreas "need to overcome the current state of division and proceed with the goal of peaceful reunification," he said in a speech to celebrate Korea`s liberation from Japanese colonial rule in 1945.

Lee warned that South Korea would not tolerate any military provocations from its neighbour.

"The North must never venture to carry out another provocation nor will we tolerate it if they do so again," he said.

But Pyongyang issued a fresh warning Sunday that its army and people would "deal a merciless counterblow" to the United States and South Korea over the war games "as it had already resolved and declared at home and abroad".

"The military counteraction of (North Korea) will be the severest punishment... ever met in the world," a spokesman for the North`s army General Chief said in a statement quoted by state media.

Cross-border tensions have been high since May when Seoul and Washington, citing multinational investigation, said Pyongyang was behind the March torpedoing of a South Korean warship that left 46 sailors dead.

The North has angrily denied responsibility and threatened retaliation.

US and South Korean troops will stage the 10-day computerised war games called "Ulchi Freedom Guardian (UFG) on Monday as part of a flurry of military drills in response to the sinking.

General Walter Sharp, who heads some 28,500 US troops based in the South, described the exercise as "one of the largest joint staff directed theatre exercises in the world".

The North denounced the war games as "practical actions aimed at full-dressed military invasion".

In July, South Korea and the United States held a massive joint naval and air drill in the Sea of Japan (East Sea). Last week the South staged its largest-ever anti-submarine drill near the disputed Yellow Sea border.

Tensions escalated last week after North Korea seized a South Korean squid fishing boat operating off the east coast.

The North also fired an artillery barrage into waters in the Yellow Sea a week ago when South Korea wrapped up its biggest anti-submarine drill.

Lee detailed a multi-step blueprint for reunification, starting with a "peace community" after the peninsula is cleared of nuclear weapons.

The next step is to dramatically develop the North`s economy and form an "economic community in which the two will work for economic integration", he said.

Eventually, the Koreas will be able "to remove the wall of different systems" and establish a community which will ensure "dignity, freedom and basic rights of all individuals", he said.

"Through this process, we can ultimately bring about the peaceful unification of Korea," he added.

Lee also proposed "unification tax" to finance the hefty cost of reuniting the long-divided nations with a growing economic gap.

Reunification with its impoverished neighbour would cost the South about 1.3 trillion dollars, according to a study commissioned by a parliamentary committee.

Central bank data showed the North`s gross domestic product last year stood at 24.7 billion dollars, less than three percent of South Korea`s.


BDST: 1702 HRS, August 15, 2010