Tens of thousands of South Korean and US troops Monday began a military exercise simulating an all-out North Korean attack, as Pyongyang matched Seoul in resuming a loudspeaker propaganda campaign across their heavily-fortified border.

The annual Ulchi Freedom exercise, which will run through August 28, is largely computer-simulated, but still involves 50,000 Korean and 30,000 US soldiers.

The drill plays out a full-scale invasion scenario by nuclear-armed North Korea and both Seoul and Washington insist it remains purely defensive in nature.

Pyongyang views Ulchi Freedom -- along with other annual South Korea-US drills -- as wilfully provocative and had threatened the "strongest military counter-action" should this year's exercise go ahead.

South Korean anti-war activists during a rally denouncing the annual Ulchi Freedom joint US-South Korea military exercise, near the US embassy in Seoul on August 17, 2015 Jung Yeon-Je, AFP

"Such large-scale joint military exercises... are little short of a declaration of a war," the North's Committee for the Peaceful Reunification of Korea, which oversees cross-border issues, said last week.

The committee specifically warned of the drill's potential for an accidental military clash that could trigger an "all-out" conflict.

Military tensions are already running high along the Korean peninsula after South Korea blamed the North for landmine blasts that maimed members of a border patrol earlier this month.

The South retaliated by resuming high-decibel propaganda broadcasts across the border, using loudspeakers that had lain silent for more than a decade.

North Korea has denied any involvement in the mine blasts and threatened "indiscriminate" strikes against South Korean border units unless the broadcasts were halted immediately.

- North turns on loudspeakers -

But on Monday Seoul's defence ministry reported that Pyongyang had resumed its own loudspeaker propaganda campaign at a site on the eastern section of the border.

The two Koreas had blasted propaganda messages at each other for years before the practice was discontinued by mutual agreement in 2004 during a period of rapprochement.

A South Kroean soldier takes position during an anti-terror drill as part of the annual Ulchi Freedom exercise, outside a tunnel in Seoul on August 18, 2014 Jung Yeon-Je, AFP/File

The rising tensions topped the agenda of a National Security Council meeting convened and chaired Monday morning by the South's President Park Geun-Hye.

"We need to maintain a strong military readiness to protect our people's lives and their properties from North Korea's provocations," Park told a cabinet meeting afterwards.

Because the armistice that ended the 1950-1953 Korean conflict was never replaced by a full peace treaty, the two Koreas technically remain at war.

Last Saturday both nations celebrated the 70th anniversary of the peninsula's liberation from Japanese colonial rule, and there had been hopes earlier this year that the event might offer the opportunity for some diplomatic fence-mending.

South Korean soldiers during an anti-terror drill as part of the annual Ulchi Freedom exercise, outside a tunnel in Seoul on August 18, 2014 Jung Yeon-Je, AFP/File

Instead, the last few months have seen cross-border ties in a downward spiral, accompanied by the all-too familiar rhetoric of mutual recrimination.

The North has also targeted the US with its verbal broadsides, citing its nuclear arsenal amid threats of retaliation over Ulchi Freedom.

The powerful National Defence Commission stressed that North Korea had moved beyond the limits of conventional warfare.

It is now an "invincible power equipped with both latest offensive and defensive means ... including nuclear deterrence," the commission said, adding that only by dropping its "hostile" policies could the US "ensure the security of its mainland".