North Korea has accused South Korea of moving a border marker on a heavily fortified zone that separates the two countries and threatened to retaliate if it is not put back.
In a state-media report Wednesday, North Korea accused the South of moving the post dozens of meters north, calling the move a "serious military provocation."
Pyongyang says it would take measures to defend itself and that South Korea would be responsible for any consequences.
South Korean military officials say the accusation is groundless.
No progress during recent meeting
The barrage of threats come just one day after the two sides held their first talks in more than a year at a joint industrial complex in the North. The 22-minute meeting ended without any progress.
The North refused to free a South Korean worker who has been held at the complex for more than three weeks. The South Korean employee who is being held at the complex was seized last month for allegedly denouncing the North's communist regime.
Pyongyang used the meeting to demand that the more than 100 South Korean companies who run factories at the complex pay more to the North for the use of its labor force.
The vice chairman of the Kaesong Industrial Council says the North's demands put businesses in a difficult situation. South Korean officials, however, say they will study and carefully consider the North's proposal.
Pyongyang proposed the talks last week, saying only that it had an important announcement to make about the Kaesong complex, which opened as a joint venture between the two countries in 2005.
The complex was built as a symbol of reconciliation between the two countries, which are still technically at war. The two Koreas have never signed a peace treaty following their 1950-1953 war.
Relations between the two Koreas soured last year after President Lee Myung-Bak made Seoul's aid to its impoverished neighbor contingent on Pyongyang's progress toward nuclear disarmament.
Tensions escalated earlier this month after North Korea launched a rocket, a move condemned by the United Nations. Pyongyang responded by expelling nuclear inspectors and withdrawing from six-nation disarmament talks.
Some information for this report was provided by AFP, AP and Reuters.