South Korea on Thursday dismissed a denial by North Korea that it twice carried out shelling along the flashpoint Yellow Sea border, which fuelled already high tensions. Seoul said its marines fired warning shots Wednesday after North Korea fired shells twice near the disputed frontier, which has seen bloody naval skirmishes in recent years and a deadly artillery attack last November. The North's military, in a cross-border message early Thursday, hit out at Seoul for "faking up" the incident saying "normal blasting" took place as part of construction work. The South's defence ministry rejected the North's claim as "routine and unnatural", saying a frontline observation post clearly saw the shells landing near the border. Of five shells fired by North Korea, three fell north of the border -- known as the Northern Limit Line (NLL) -- and two landed close to it, prompting warning shots from marines based on Yeonpyeong island, a ministry spokesman told AFP. "Soldiers using observing equipment identified the spots where the shells landed," he said. The incident came after North Korea urged South Korea and the United States to cancel the 10-day Ulchi Freedom Guardian joint military exercise, an annual computer-assisted simulation drill starting next week. US and South Korean officials described the exercise as defensive and routine, but the North denounced it as preparation for "a war of aggression". The North said the South had fabricated Wednesday's incident as a "pretext" to justify the joint exercise. "The South Korean military warmongers spread misinformation that the (North Korean) army perpetrated a shelling 'provocation'," it said. Wednesday's incidents came after the North made apparent peace overtures in recent weeks and expressed interest in restarting stalled six-nation nuclear disarmament talks. Nuclear envoys from the two Koreas held rare talks in Bali last month, and a senior Pyongyang official visited New York later for discussions with US officials. Washington urged North Korea to show "restraint". "Our understanding is that this exchange of fire has now ended. That's a good thing. We call on (North Korea) to exercise restraint," State Department spokeswoman Victoria Nuland said. She said North Korea should "begin to take steps" aimed at restarting the six-party talks, which involve the two Koreas, China, Japan, Russia and the United States. The South's unification ministry said Wednesday's shelling would not affect its planned shipment of emergency aid for North Korean flood victims. Seoul has offered to provide aid worth five billion won ($4.7 million), the first such offer since the North shelled Yeonpyeong last November. Troops on frontline islands have been on high alert since the attack killed four South Koreans including two civilians and damaged scores of buildings. South Korea has reinforced troops and sent extra weaponry to the islands along the NLL drawn unilaterally by United Nations forces after the 1950-53 war. The North refuses to accept the NLL and says the border should run further to the south. The boundary line was the scene of naval clashes in 1999, 2002 and November 2009. The South also accuses the North of torpedoing one of its warships near the NLL in March 2010, with the loss of 46 lives -- a charge Pyongyang denies.