South Korea and its northern neighbor, the DPRK, have exchanged fire in waters off the west coast of the divided Korean Peninsula. It's seen as the most severe exchange of fire in nearly 6 decades.

Tuesday's incident happened near the contentious sea border called the Northern Limit Line. At least two South Korean marines were killed and 16 others wounded.

Tensions are running high on the Korean Peninsula.

According to South Korean military officials, around 2:30 p.m. local time, the Democratic People's Republic of Korea fired scores of artillery onto a South Korean island and into waters near its tense western maritime border with the DPRK.

The South Korean military responded with its own artillery barrage.

Seoul has called the DPRK's action "unacceptable", vowing to retaliate against further attacks.

Hong Sang-Pyo, Sr. S. Korean President Secretary, said, "It can never be tolerated. Our military has immediately and strongly counteracted, according to battle regulations, against North Korea's provocation. Our military will firmly punish North Korea if it carries out additional provocation. North Korean authorities will have to rightly take responsibility for this incident."

The DPRK's KRT News agency says that South Korea fired first, launching artillery shells inside its territorial waters near its Yonphyong Islet off the west coast of the Korean peninsula, around 1:00 pm local time. The DPRK also vowed to respond militarily to any further attacks from South Korea.

"Should the South Korean puppet group dare intrude in the DPRK's territorial waters, the revolutionary armed forces of the DPRK will continue taking merciless military counter-actions against it."

The South Korean military has been put on its highest peacetime alert. Fighter jets have been deployed to the Yellow Sea and Yeonpyeong island where the artillery exchange occurred.

An emergency meeting was called by South Korea's president Lee Myung-bak, shortly after the attack, where he cautioned against escalating the situation.

The clash comes as South Korea holds a massive annual military exercise involving 70-thousand troops. The drill began Monday and will last until November 30th.

The artillery exchange also came shortly after Pyongyang's disclosure of a new and sophisticated facility to enrich uranium.

South Korea and the DPRK have remained at odds on the so-called NLL, which was fixed unilaterally by the U.S.-led United Nations Command after the Korean War.

South Korea holds the NLL as the de-facto western inter-Korean border, while the DPRK rejected the it, only recognizing the demarcation line it drew in 1999, which was further south of the NLL.

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