South Korea's president vowed "no retreat" Monday in a tense military standoff with North Korea, and insisted Pyongyang apologise as the two rivals struggled to negotiate their way out of the crisis.

With gruelling talks between top negotiators from both sides well into a third day at the border truce village of Panmunjom, Park Geun-Hye's hardline stance underlined the challenge they face in striking a mutually acceptable deal.

The North must make a "clear apology" for landmine blasts this month that maimed two patrolling South Korean soldiers, Park said in televised comments to a meeting of senior aides.

Otherwise, she added, Seoul would continue the high-decibel propaganda broadcasts across the border that have infuriated the North and prompted threats of concerted military strikes by its army.

The current standoff has already triggered a rare exchange of artillery fire, with both sides ramping up the military rhetoric and flexing their weaponry.

"There will be no retreat in the face of North Korean threats," Park said, promising "stern retaliation" for any further provocation.

Park has maintained a strong line on not appeasing North Korea since she came to office, and will push back hard against any compromise that might be seen as rewarding its behaviour.

The talks that began Saturday in Panmunjom between top aides to both countries' leaders have so far failed to thrash out a mutually acceptable way to calm the situation, despite two all-night sessions.

- Seeking the upper hand -

The North has denied any role in the recent mine blasts and analysts say it will never accede to the apology demand.

"And President Park knows that, of course," said Yang Moo-Jin, a professor at the University of North Korean Studies in Seoul.

"Both sides are really just trying to ramp up pressure on the other, looking for an upper hand in what are clearly very tough negotiations," Yang said.

Pyongyang also appeared to be seeking greater leverage, with the South's defence ministry saying the North had doubled the number of its artillery units at the border and put two-thirds of its 70-strong submarine fleet to sea.

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"The North is adopting a two-faced stance with the talks going on," said a Seoul defence ministry spokesman, who described the scale of the submarine deployment as "unprecedented".

The crisis is being eyed with mounting concern by neighbouring countries and beyond, with China and Japan calling for restraint and UN Secretary General Ban Ki-moon urging both sides to "redouble" their efforts to reach a compromise.

Meanwhile, the United States, which has nearly 30,000 US troops permanently stationed in South Korea, has pledged its commitment to the defence of its key Asian ally.

Seoul and Washington are reviewing the possible deployment of "strategic US military assets" on the peninsula, the South Korean defence ministry said, without elaborating.

Technically, the two Koreas have been at war for the past 65 years since the 1950-53 Korean War ended with a ceasefire that was never ratified by a formal peace treaty.

- Top aides -

The talks in Panmunjom, where the Korean War ceasefire was signed, are being led by South Korean National Security Adviser Kim Kwan-Jin and his North Korean counterpart Hwang Pyong-So -- a close confidant of leader Kim Jong-Un.

Their marathon sessions reflected the inherent difficulties of finding a face-saving end to the standoff.

"Any resolution of issues now on the table will require a bold decision from their leaders," said Yang Moo-Jin, who nevertheless expressed a degree of optimism.

"The fact that they are still talking shows a genuine determination to get something out of this -- the only question is what," he said.

Despite the uncertainty, the crisis has failed to generate any real panic among ordinary South Koreans, who have become largely inured over the years to the North's regular -- and regularly unrealised -- threats of imminent war.

Nevertheless, thousands of civilians living on frontline border islands or near military propaganda units have spent much of the past three days in underground shelters as a preventive measure.

And the South Korean embassy in Beijing issued a rare travel warning Monday, advising its citizens not to travel to regions in China close to the North Korean border.