US and South Korean forces practised attacks on potential seaborne North Korean infiltrators Tuesday, on the third day of a major naval exercise designed to deter the communist state.

The allies are staging the war games in response to what they say was a deadly North Korean submarine attack on a South Korean warship. They have shrugged off the North's threats of nuclear retaliation for the drill.

About 20 ships including the 97,000-ton carrier USS George Washington, 200 aircraft including four F-22 Raptor stealth fighters, and 8,000 personnel are taking part in the largest joint exercise for years.

Tuesday's drills focused on destroying infiltrating enemy submarines, semi-submersible high-speed boats or seaborne special forces, a spokesman for Seoul's Joint Chiefs of Staff told AFP.

The joint forces also plan separate anti-ship and anti-aircraft drills, while jet fighters are to launch missiles at sea and at firing ranges on land.

Seoul and Washington say the four-day exercise which began Sunday in the Sea of Japan (East Sea) -- the first in a series -- is designed to stress that future attacks from the North will meet with a decisive response.

The United States has also announced new sanctions to punish the North for the sinking and push it to scrap its nuclear weapons programme.

The North denies responsibility for the attack on the Cheonan warship in March which cost 46 lives, and denounces the exercises as a rehearsal for war.

Its powerful National Defence Commission said Saturday the army and people "will legitimately counter with their powerful nuclear deterrence the largest-ever nuclear war exercises to be staged by the US and the South Korean puppet forces".

Pyongyang kept up the verbal attacks Tuesday, the 57th anniversary of the armistice which ended the three-year Korean War.

But the South's defence ministry said there were no unusual military moves north of the heavily fortified border that has remained in place ever since.

"If the US and its puppets ignite a fire in... waters around the Korean peninsula, it will spread to all Northeast Asia as well as the whole peninsula and eventually develop into a world war," said a spokesman for an official body called the Committee for the Peaceful Reunification of the Fatherland.

"The army and people of the DPRK (North Korea) will respond to the enemy's 'show of deterrence' sternly with a bigger and more formidable deterrent."

The general commanding 28,500 US troops in the South described the Cheonan sinking as a breach of the armistice.

"I ask all countries, especially China, to work together in responding to North Korean provocations," General Walter Sharp told a ceremony marking the armistice anniversary at the border truce village of Panmunjom.

"All nations should assist in convincing North Korea that security and prosperity lies in this cessation of its provocative behavior," Yonhap news agency quoted him as saying.

China, the North's economic prop and sole major ally, lobbied to soften the wording of a UN Security Council statement this month on the sinking.

At Imjingak just south of the border, South Korean activists launched propaganda leaflets towards the North Tuesday to mark the anniversary.

Protesters ripped up a North Korean flag and called for the death of leader Kim Jong-Il.

"The leaflets were to mark the anniversary of the truce 57 years ago, which the North Koreans call a day of victory," said Park Sang-Hak, a former defector from the North.

"With us carrying out the joint exercise, North Korea should now be in a quasi-state of war. And after the exercise, I think they will provoke us again."