The U.S. and South Korea began a joint military exercise in the Yellow Sea on Sunday, while reports of new artillery fire sent residents on South Korea's Yeonpyeong Island into bomb shelters.

South Korea's Joint Chiefs of Staff said that one artillery round was heard being fired from a military base near North Korea's sea border on Sunday. It wasn't clear where the round landed.

As a result, sirens coaxed island residents into bomb shelters, as the U.S. and South Korea began conducting military exercises in the region.

On Saturday, North Korea warned of retaliation if the United States and South Korea went ahead with naval exercises in the Yellow Sea.

The four-day military exercise began on Sunday, after the two Koreas used strong language to suggest more violence was possible.

Resentment between the two sides has grown since Tuesday, when North Korea fired an artillery barrage onto the small fishing island of Yeonpyeong that claimed the lives of two South Korean marines and two civilians.

Protesters took their anger to the streets of the South Korean capital of Seoul on Saturday, not long after a national public funeral was held for the two slain marines.

During the funeral, a military commander said "they will take the anger and hostility in their bones and strike back at North Korea," CTV's Janis Mackey Frayer told CTV News Channel Saturday during a telephone interview from Yeonpyeong.

"There's been a ramping up in the sharp words from both sides over the last few days. The latest from Pyongyang is that North Korean leaders are vowing a sea of fire if their territory is breached and if the U.S. and South Korea go ahead with these joint military exercises, they should be seeing unpardonable provocation," Mackey Frayer said.

She also noted that the South Korean President, Lee Myung-bak, said he was going to review the rules of engagement and agreed that in the past, South Korea had been too passive when it comes to acts of aggression by North Korea.

He cited the sinking of a South Korean military warship in March, where a North Korean torpedo was responsible for killing 46 sailors, according to a South-Korean led investigation.

Both the U.S. and South Korea have been urging China, North Korea's closest ally, to use its influence to help moderate the situation. Though China has assured it will do its best to ease tensions, the joint military exercise by the two countries is causing unease in Beijing.

On Friday, North Korea used a burst of artillery fire to signal its fury with South Korea and the U.S. North Korea warned the conditions brewing in the Korea peninsula have pushed it to the "brink of war."

The flash of artillery fire could be heard in Yeonpyeong but did not cross North Korea's border.

Only a few dozen South Koreans have stayed behind on the island, which lies just 11 kilometres from the shores of North Korea. They ran to shelters after seeing the faraway flash of artillery.

Friday's artillery burst occurred while U.S. Gen. Walter Sharp was touring the region of Yeonpyeong that came under attack.

The commander of the 28,000 U.S. troops stationed in South Korea called out the North Korean regime for violating the armistice that ended the Korean War in 1953.

"We at the United Nations Command will investigate this completely and call on North Korea to stop any future attacks," Sharp said Friday.

But in North Korea, Pyongyang's government insisted that the U.S. was an aggressor, by stating an intention to take part in the joint military drills with South Korea in disputed waters.

A North Korean military official bragged about the Tuesday attack in which the military "precisely aimed and hit the enemy artillery base."

The official also made reference to a possible forthcoming "shower of dreadful fire."

In South Korea, more troops and better weapons were being deployed to the island, while the president and his government tried to pin down their next move against the unpredictable and defiant North Korea regime.

While the U.S. has sent a nuclear-powered aircraft carrier to the Yellow Sea to take part in the exercises with South Korea, there seem to be few options for cooling things down with North Korea.

As a result, South Korea and the U.S. are leaning on China to help drop the temperature of the feverish resentment that is building up in North Korea.

China is a rare source of influence on North Korea and Chinese state media announced Friday that Beijing's foreign minister had met with the North Korean ambassador.

With files from The Associated Press