SEOUL, South Korea — One month after a deadly exchange of artillery fire, the two Koreas ramped up their rhetoric Thursday, with South Korea’s president pledging unsparing retaliation if attacked again and a top North Korean official threatening a "sacred" nuclear war if provoked.

South Korean troops, tanks and fighter jets put on a thundering display of force as President Lee Myung-bak visited with soldiers at a base near the border, while North Korea’s elite marked a key military anniversary by lashing out at the South for encouraging war.

For both countries, the rallying cries and military maneuvers mainly seemed designed to build support at home. But they raised fears anew of all-out war on a peninsula that New Mexico Gov. Bill Richardson called a "tinderbox" after returning from a visit to the North Korean capital this week.

The two Koreas and their allies called a truce in 1953 to end three years of devastating war, but violence has flared up from time to time, most recently in the disputed waters off their west coast. North Korea does not recognize the maritime line drawn by U.N. forces, and the territorial dispute in the Yellow Sea has erupted into deadly naval skirmishes.

In March, a South Korean warship went down in the western waters, killing 46 sailors. And a month ago, South Korean live-fire drills in nearby waters triggered a North Korean artillery shower on Yeonpyeong Island that killed four South Koreans, the first attack on a civilian area since the Korean War.

Caught by surprise, Seoul since has beefed up its rules of engagement and has staged military drills, including joint exercises with U.S. troops, meant to remind the North of its superior firepower. The South even carried out provocative artillery drills from Yeonpyeong Island on Monday in a bold dare to the North to retaliate.

On Wednesday, rifle-toting marines ringed a hillside near the border where a Christian group lit a steel tower dressed up as a twinkling Christmas tree — a structure easily visible from atheist North Korea. Notes left on participants’ chairs advised them to take cover and seek shelter if attacked.

The drills continued Thursday, with tanks firing artillery and fighter jets dropping bombs at training grounds in Pocheon, some 20 miles (30 kilometers) from the North. The boom of cannons echoed throughout the valley and the hills erupted in smoke during the brief but dramatic exercise.

There was a theatrical quality to the exercises: dozens of schoolchildren in bright yellow jackets were shuttled to the site to watch from bleachers.

President Lee Myung-bak met with troops manning a front-line army base in the east on the type of morale-boosting visit more commonly seen in the North. He vowed to retaliate if attacked again.

"I had thought that we could safeguard peace if we had patience, but that wasn’t the case," he told the troops, according to his office. Any surprise attack will be met with an "unsparing" response, he warned.

After days of showing restraint, North Korea condemned the drills as a "grave military provocation." Defense chief Kim Yong Chun said North Korea was prepared to launch a "sacred war" and poised to use its nuclear capabilities to defend itself.

Kim said in Pyongyang that the military would deal "more devastating physical blows" if its rivals violate North Korean territory by even a millimeter. He also threatened to "wipe out" South Korea and the U.S. if they start a war, the official Korean Central News Agency reported.

North Korea is believed to have enough weaponized plutonium for at least a half-dozen atomic bombs, and also has revealed a uranium enrichment program that would give it a second way to make nuclear weapons.

After negotiating for years with its neighbors and the U.S. on dismantling its nuclear program in exchange for aid and concessions, Pyongyang walked away from the talks in 2009.

China, North Korea’s only major ally and the impoverished nation’s main benefactor, has pushed for a resumption of the disarmament talks as a vehicle for dialogue.

"The current situation remains highly complicated and sensitive," Chinese Foreign Ministry spokeswoman Jiang Yu told reporters. "We appeal to the relevant parties to keep calm, exercise restraint, and adopt responsible attitudes and do more to ease the situation and safeguard peace and stability on the peninsula."

Richardson warned in an interview with The Associated Press on Wednesday that violence could flare anew if the South continues its drills and the North abandons its stated intention of refraining from retaliation.

"The situation is still a tinderbox. There’s still enormous tension, enormous mistrust and I believe diplomacy is what is needed to get us out of this tinderbox," he said in New Mexico after returning from a private trip to Pyongyang.

But he said the North Koreans "realize they went too far," and appear willing to reach out and change.

"This isolation that they’ve imposed upon themselves, this bunker mentality is not working," he said. "Their people need food, their people need jobs, they need to get out of sanctions and I believe they realize this and it could be they’re changing. But let there be verification because their credibility is suspect."

North Korea is driven not just by military zeal but also broader diplomatic, political and economic issues, according to a senior South Korean government official who spoke on condition of anonymity, citing government policy.

He said the succession movement in North Korea has added an extra layer of unpredictability to its behavior, with the leadership using provocations to build solidarity and loyalty at home.

Leader Kim Jong Il is believed to be grooming his young son Kim Jong Un to succeed him. The heir apparent made his formal political debut at a ruling Workers’ Party convention in September.

"When Kim Jong Il’s power transfer started in the 1970s and early 1980s, provocations were more frequent," the official said. "It is the same situation, but with (a) different person."

In recent days, North Korea has turned its attention to glorifying Kim Jong Il and his "songun," or "military-first," policy. A rare statement sent to the AP, apparently by the North Korean Embassy in Beijing, praised Kim’s role as commander of the Korean People’s Army.

"The traditional single-hearted unity of the Korean society in which all the people are united around their leader in one ideology, mind and purpose has entered a new, higher stage of development under Kim Jong Il’s songun-based leadership," it said.

The statement praised North Korea’s soldiers, and said "the people are working hard to learn from their spirit and mettle."

North Koreans will be marking Kim’s appointment to supreme commander on Friday, a day that is also celebrated by many Christians in South Korea as Christmas Eve.

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Foster Klug in Pocheon, South Korea, Hyung-jin Kim in Seoul, Gillian Wong in Beijing and Susan Montoya Bryan in Santa Fe, New Mexico, also contributed to this report.