Seoul, South Korea: Relations between North and South Korea, already strained over the sinking of a South Korean warship, deteriorated to their worst point in many years on Tuesday as the South Korean president redesignated the North as its archenemy, and the North retaliated by severing its few remaining ties with the South.
The moves heightened concerns about where the acrimony on the Korean Peninsula was heading.
North Korea's state news agency said the North would cut off all communications between the two countries, including a Red Cross contact at the border, as long as the South Korean president, Lee Myung-bak, was in office. The North also said it was expelling all South Korean officials, but not workers, from a joint industrial park at the North Korean town of Kaesong.
The North also banned South Korean ships and airplanes from using its territorial waters and air space. On Tuesday, the South's two main airlines, Korean Air and Asiana, began rerouting passenger jets to avoid North Korean air space.
Earlier, President Lee said he would redesignate North Korea as his country's main enemy, as the South Korean and United States militaries announced plans for major naval exercises in a show of combined force.
South Korea's relisting of North Korea as its "principal enemy" -- a designation dropped during inter-Korean detente in 2004 -- symbolizes the shift in South Korean policy toward the North.
On Monday, South Korea cut off trade with North Korea, denied North Korean merchant ships use of its sea lanes and called on the United Nations to censure the North for what it called the deliberate sinking of one of its warships by a North Korean torpedo. Forty-six sailors were killed in the March 26 sinking.
South Korea had formally designated North Korea as its "principal enemy" in 1994 after the North threatened to turn Seoul into a "sea of fire" during the height of an international crisis over its development of nuclear weapons.
But that designation, renewed in the South's Defense White Paper every other year, was dropped in 2004, the same year the two Koreas also suspended propaganda broadcasts across their border. The 2010 paper was due out in October.
"In the past 10 years, we have failed to establish the concept of principal enemy," Mr. Lee told a meeting of senior advisers for his government on Tuesday, referring to the Sunshine Policy of cultivating reconciliation with the North by his two liberal predecessors, Kim Dae-jung and Roh Moo-hyun. "We have ignored the very danger under our feet."
Tensions between the Koreas escalated after the sinking of the vessel and after Mr. Lee's pledges to make North Korea "pay a price."
The two countries have technically remained at war for more than 50 years. A 1953 armistice ended three years of fighting in the Korean War, but no peace treaty has ever been signed, and the demilitarized zone separating the two Koreas is among the world's most heavily armed borders.
The North Korean leader, Kim Jong-il, whose government has threatened an "all-out war" against any sanctions, has ordered his military and reserve forces to be ready for war, said an organization of North Korean defectors on Tuesday. Last Thursday, when the South formally accused the North of torpedoing its ship, a senior North Korean general relayed Mr. Kim's order through a broadcast to intercoms fitted at most North Korean homes, said North Korea Intellectuals Solidarity, a Web site based in Seoul and run by North Korean defectors.
The news caused the main stock index in Seoul to drop more than 3 percent in early trading. The South Korean won also weakened sharply.
The ruffles in the financial markets indicated that investors, already shaken by financial trouble in the euro zone, were seriously monitoring the current phase of tension-raising on the divided Korean Peninsula.
The exile group said it learned of the order from sources inside the North.
"We do not hope for war but if South Korea, with the U.S. and Japan on its back, tries to attack us, it's Chairman Kim Jong-il's order to finish the task of unifying the fatherland, which was left undone" during the Korean War, the group quoted the instruction as saying.
It said the North Korean authorities were also mobilizing outdoor rallies of reserve soldiers under the slogan of "Retaliation for retaliation! All-out war for all-out war!" Those mobilized were ordered to wear their military uniforms.
Seoul officials could not immediately confirm the report. During periods of tension with the outside world, the Pyongyang regime has often mobilized huge outdoor rallies. It uses such rallies to strike fear of the outside world into its impoverished people and to popular support around Mr. Kim, analysts said.
With Secretary of State Hillary Rodham Clinton calling the Korea situation "highly precarious," the Pentagon and South Korea announced they would soon conduct joint naval exercises, including antisubmarine drills in the Yellow Sea.
On Monday evening, South Korea resumed its "Voice of Freedom" radio broadcasts directed at the North Korean people. It broadcast a South Korean pop song by a girl band, boasted the South's economic prosperity and belittled the North Korean government for failing to feed its people.
Soldiers were also rebuilding loudspeaker systems along the border to bombard the front-line North Korean soldiers and villages with the same broadcasts. On Monday, the North warned that it might shell those tools of "psychological war." On Tuesday it said it was launching an unspecified "counterattack."
(The photo above shows the wreckage of the South Korea naval vessel Cheonan, which was sunken on March 26 near the maritime border with North Korea. Courtesy: AP)