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Edition: U.S. Article Comments (4) Slideshow Video Save Email Print Reprints Most Popular Most Shared Apple overtakes Microsoft as biggest tech company 26 May 2010 BP exec: Appears only drilling mud flowing from well 26 May 2010 Apple overtakes Microsoft as biggest tech company 26 May 2010 U.S. to suspend Arctic drilling: Alaska senator 1:11am EDT Lee DeWyze wins "American Idol" as Cowell departs 2:55am EDT Risque Venus brings Moulin Rouge style to French Open 26 May 2010 Ellen DeGeneres starts own record label, signs YouTube kid | Video 26 May 2010 BP monitoring to see if "top kill" plug working | Video 1:45am EDT In BP command center, CEO and Dr Chu plot course 26 May 2010 BP, Transocean workers argued before blast: witness 26 May 2010 Apple overtakes Microsoft as biggest tech company 26 May 2010 Apple overtakes Microsoft as biggest tech company 26 May 2010 Facebook boosts privacy controls amid criticism 26 May 2010 U.S. reverses stance on treaty to regulate arms trade 14 Oct 2009 U.S. to suspend Arctic drilling: Alaska senator 1:11am EDT Foxconn hit by 10th jumping death 1:53am EDT Lee DeWyze wins "American Idol" as Cowell departs 2:55am EDT In BP command center, CEO and Dr Chu plot course 26 May 2010 Stalin blocked attempts to kill Hitler: general 25 May 2010 Euro nears 4-year low vs dollar | Video 1:44am EDT South Korean navy holds border anti-sub drills Jack Kim SEOUL Thu May 27, 2010 3:17am EDT Factboxes Factbox: South Korea's industrial park in the North Tue, May 25 2010 Factbox: International sanctions against N. Korea Mon, May 24 2010 Related News U.S. officials see China rethinking N. Korea stance 12:20am EDT Q+A: How serious is the crisis on the Korean peninsula? Tue, May 25 2010 Q+A: Why a "state of war" still exists on Korean peninsula Tue, May 25 2010 Corrected: Scenarios:N.Korea again at centre of regional tension Wed, May 26 2010 Related Video Clinton urges North Korea to change Wed, May 26 2010 North Korea cuts ties with South UN investigates S. Korea ship claims North Korea denounces South South Korea punishes North < 1 / 17 > View Full Size SEOUL (Reuters) - South Korea's navy staged anti-submarine drills on Thursday in tense waters bordering North Korea amid signs that China, under pressure from regional powers, is reviewing ties with the isolated communist state. World | China | South Korea | North Korea In another escalation of the blistering war of words, North Korea accused the South of driving 10 years of developing ties into the ground and said it would scrap agreements between the two sides' militaries that guaranteed safety of cross-border exchange. The move could push the North a step closer to severing a border link which provides access to a joint industrial complex in the North Korean city of Kaesong. "We will completely repeal the military guarantee measures that our army is to enforce related to North-South cooperation exchange," the North's army chief of staff said in a notice served to the South and carried by its official KCNA news agency. The South Korean naval exercise is aimed at better detecting intrusions by North Korean submarines after investigators, including experts from the United States and Sweden, accused the North of firing a torpedo that sank one of its warship, killing 46. The drills, which also come after the South's military upgraded its alert level, are likely to further anger Pyongyang, which has already cut most ties with Seoul after it sanctioned the hermit state for sinking the Cheonan corvette in March. The North has threatened to shut the last road link with the South if Seoul resumes loudspeaker propaganda broadcasts across their heavily armed border. It has warned of war if the South goes ahead with sanctions announced this week. Mounting antagonism between the two Koreas has unnerved investors, worried their bitter rivalry could spill over into conflict. Most analysts say that neither side is ready to go to war but warn that there could be more skirmishes, especially along their disputed sea border off the west coast. Traders said the issue continues to hang over the market though it is no longer driving prices down as it did early in the week. The won looked set to end a five-day losing streak as investors saw its recent downturn as overdone. CHINA ROLE Washington is looking for ways to avoid the issue collapsing into conflict, with Secretary of State Hillary Clinton pressing Beijing to coax its North Korean ally into changing course. Clinton, who was in Seoul for talks on Wednesday, urged the North to stop threatening its neighbors, saying Washington would review measures to hold Pyongyang's leaders accountable for the sinking of the Cheonan. Clinton also called on China, which almost single-handedly props up the North Korean government and its destitute economy, to join efforts to pressure the North to change its ways. U.S. officials traveling with Clinton said China may be ready to discuss how the United Nations should respond to the sinking of the Cheonan, and had shown indications that it was rethinking its ties with Pyongyang. South Korea will ask the U.N. Security Council as early as next week to take up the issue, its Yonhap news agency said. Beijing has so far not endorsed the findings of the South Korean investigation, which concluded last week that there was overwhelming evidence the North torpedoed the ship. But South Korean officials anticipate some form of progress in China's response when Premier Wen Jiabao visits Seoul on Friday for a summit with President Lee Myung-bak. The two will travel to the South Korean resort island of Jeju on Saturday for a regional summit that also involves Japanese Prime Minister Yukio Hatoyama, where the issue is likely to overshadow discussions on boosting trade. The threat to cut off border links could mean the beginning of the end for the Kaesong industrial project, where more than 100 South Korean firms use cheap local labor and rent to make consumer goods and has been one of a few legitimate sources of income for the North, worth tens of millions of dollars a year. North Korea's Supreme People's Assembly is scheduled to meet on June 7, two months after the rubberstamp parliament passed constitutional amendments that strengthened leader Kim Jong-il's powers. Experts say a major announcement is likely. (Editing by Jonathan Thatcher and Jeremy Laurence) World China South Korea North Korea Comments See All Comments (4) | Post Comment May 26, 2010 11:53pm EDT these two countries will always be at odds and only a heartbeat away from all out war it has been this way ever since i can remember, theey seem to enjoyit GAPETERSON1958 Report As Abusive May 27, 2010 12:09am EDT Pls check out the following link FYI. Subject: Letter to Hillary Clinton, U.S. Secretary of state http://www.seoprise.com/board/view.php?table=seoprise_12&uid=154146 wineworm Report As Abusive May 27, 2010 12:26am EDT Has anyone thought of the possibility that this could have been a clandestine operation launched by the Russians? Roostah Report As Abusive May 27, 2010 1:53am EDT I would like to ask Clinton if she really thinks she supports South Korean people. If she means it, it must be stopped. The international investigation team isn’t such an expert team that most people believe in according to previous SK secretary based on US official’s remark. US official told him that the team just supported technolgical part and agreed to Korean investigation team’s results, so he was worried about the possibility that it could be used politically and sadly it is now. Even in those team there have allegedlly been a opinion that the torpedo is so worn out that it is possible it had been under the deep sea before. According to today’s news, one of investigation team’s members mentioned ‘Number 1′ on the ship seems to have been written by insider not North Korean cause if it was written by NK, letter should be covered by the rust althogh it has been comfirmed by microscope that the letter is on the rust. Ally between South Korean goverment and The US incite Korean peninsula to be involved in more dangerous status. I originally hate South Korean ruilling party and current president although Clinton has made me disappointed as I was in favour of her and I didn’t expect she, used to protest against US’s involvement of Vietman war, would stand on this positon. dionisos Report As Abusive See All Comments (4) Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Analyst Research Mobile Newsletters RSS Podcasts Widgets Your View Labs Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week FindLaw Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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