North Korea staged an artillery drill Friday within earshot of a South Korean island shelled earlier this week, and warned that an upcoming US-South Korean naval exercise heightens the risk of war.
Seoul named a former military chief as its new defense minister to try to restore confidence in the armed forces, after their allegedly feeble response to Tuesday's deadly bombardment of Yeonpyeong island.
The distant sound of the latest shelling sent jittery residents of the front-line border island scrambling for air raid shelters.
South Korea said it appeared to be an exercise and no shells landed on its territory.
The top US commander in South Korea, General Walter Sharp, visited Yeonpyeong during the brief panic.
He denounced Tuesday's attack -- which killed two civilians and two marines, injured 18 other people and set buildings ablaze -- as a violation of the armistice which ended the 1950-53 war.
The bombardment was the first to hit civilian areas in the South since the war and sparked widespread anger.
Seoul's allegedly weak response also drew strong criticism from newspapers crying out for revenge, and Kim Tae-Young stepped down Thursday as defense minister.
President Lee Myung-Bak Friday named Kim Kwan-Jin, former chairman of the Joint Chiefs of Staff, to the post.
"He has been assessed as a typical soldier with rationality and strong leadership," said senior secretary for public affairs Hong Sang-Pyo.
Hong said the new minister, 61, was expected "to restore people's trust in the military and enhance military morale".
A US aircraft carrier battle group was heading for the Yellow Sea for the four-day drill starting Sunday, a show of force designed to deter the North.
Pyongyang, unrepentant over its barrage, criticized "the US imperialists and South Korean puppet war-like forces" for what it called an exercise in "sabre-rattling".
"The situation on the Korean peninsula is inching closer to the brink of war due to the reckless plan of those trigger-happy elements to stage again the war exercises targeted against the (North)," its official news agency said.
Pyongyang has used such language frequently in the past. It was unclear whether it would try to disrupt the drill -- which has also been criticized by the North's sole major ally China.
The US military says the exercise is defensive and was planned well before the North's "unprovoked artillery attack," but that it demonstrated the US "commitment to regional stability through deterrence".
The North has justified its firing Tuesday as retaliation, after South Korea allegedly lobbed shells into its waters during an exercise.
In response, the South fired 80 shells at the North's coastal artillery positions but says it did not call in air strikes, to avoid escalating the conflict.
The South will send more troops and guns to five front-line islands and said it would change the rules of engagement to let its military hit back harder against any future attacks.
The North, in another statement Friday, vowed to stage such attacks if there is any further "provocation" by the South.
In Seoul's southern suburbs, President Lee paid tribute to the two dead marines, burning incense and laying flowers at altars set up in a military hospital.
Parts of Yeonpyeong island resembled a war zone Friday, an AFP correspondent reported. Stray dogs searched for food after their owners joined an exodus of hundreds of villagers to the mainland.
Some residents fled the island for fear of more shelling from the North when the joint naval exercise starts, said policeman Kang Sang-Beom.
"My mission is to prevent possible looting as the village is virtually deserted," Kang said. "We are also looking for any more dead."
Fears also spread to other front-line islands.
Residents were on a knife-edge on Baengnyeong island, located near the spot where, according to a multinational expert panel, a North Korean submarine in March torpedoed a South Korean warship.
Forty-six sailors on board were killed.
"It feels like the calm before the storm, ahead of the US-South Korea joint exercise that will begin Sunday," a 37-year-old local government official told AFP by phone.
"After seeing what happened to Yeonpyeong island, many residents feel nervous and they want to get off this island."
Many observers believe this week's attack was meant to highlight the military credentials of the North's heir apparent, Kim Jong-Un, youngest son of leader Kim Jong-Il.