The North's military warned that it would fire at South Korean border towns if Seoul continued to allow activists to launch propaganda leaflets toward the communist country, Pyongyang's official Korean Central News Agency said. The warning was conveyed to South Korea's military earlier Sunday, it said.
"South Korea's traitor puppet regime must recognize the seriousness of the situation and immediately stop anti-(North Korea) psychological warfare," the KCNA said.
It accused South Korean activists and lawmakers of flying balloons carrying hundreds of thousands of leaflets critical of North Korea's government on the North's most important national holiday, an apparent reference to leader Kim Jong Il's 69th birthday, which fell on Feb. 16.
It was unclear whether more balloons had been launched since then.
The warning came one day before the start of annual military drills between South Korea and the United States.
Pyongyang has called the drills a preparation to invade North Korea, though South Korean and U.S. officials have repeatedly said they are purely defensive and that they have no intention of attacking.
About 28,500 U.S. troops are stationed in South Korea to help deter potential aggression by the North.
Tensions on the Korean peninsula spiked last year over two deadly incidents - the sinking of a South Korean naval ship blamed on the North and a North Korean artillery barrage in November that killed four people on a front-line South Korean island. North Korea denies it was involved in the sinking of the ship, which killed 46 South Korean sailors.
The countries' military officers met earlier this month but failed to reach a breakthrough, with both sides accusing the other of rupturing their first dialogue since the November bombardment.
North Korea later threatened not to hold any more military talks with Seoul.
The two Koreas are still technically at war because the 1950-53 Korean War ended with an armistice, not a peace treaty.