South Korean and US troops launched a joint military exercise on Monday, prompting an infuriated North Korea, which has threatened both countries with nuclear attack, to sever a hotline with Seoul.
The start of the two-week "Key Resolve" exercise follows a week of escalating tensions on the Korean peninsula, with North Korea lashing out over tightened UN sanctions adopted after its third nuclear test last month.
Pyongyang has condemned the joint manoeuvres as a provocative invasion rehearsal and announced that - effective Monday - it was scrapping the 1953 armistice ending the Korean War and voiding peace pacts signed with the South.
The South's unification ministry confirmed that the North appeared to have carried through on another promise to cut the hotline between Pyongyang and Seoul.
The two sides habitually speak twice a day, but "the North did not answer our call this morning", a spokeswoman for the South's unification ministry said.
The hotline was installed in 1971 and the North has severed it on five occasions in the past - most recently in 2010.
The Rodong Sinmun, the newspaper of the North's ruling communist party, confirmed in Monday's edition the "complete end" of the armistice which halted the 1950-53 Korean War hostilities.
"With the ceasefire agreement blown apart... no one can predict what will happen in this land from now on," the newspaper said.
As the war concluded with a military armistice rather than a peace treaty, the two Koreas remain technically at war.
Sabre-rattling and displays of brinkmanship are nothing new in the region, but there are concerns that the current situation is so volatile that just one accidental step could escalate into serious confrontation and conflict.
"Key Resolve" is an annual, largely computer-simulated exercise, but still involves the mobilisation of more than 10,000 South Korean and 3,500 US military personnel. About 28,500 US troops are stationed in South Korea.
"This year is particularly important because it is the first time the (South Korean) joint chiefs of staff have planned and executed this combined exercise," said US General James Thurman, head of the Combined Forces Command.
South Korea is scheduled to assume wartime operational control of the combined forces in December 2015.
The South Korean defence ministry says North Korea is expected to carry out its own large-scale military drill along its eastern front this week, involving the army, navy and air force.
North Korean artillery bases on islands close to the disputed maritime border have already placed their cannons in firing positions, ministry officials informed.
"The North appears to be stepping up military activities," spokesman Kim Min-Seok told reporters.
Last week, North Korea leader Kim Jong-Un told his troops to prepare for "all-out war" as he toured units responsible for launching an artillery attack on a South Korean island in 2010 that killed four people.
The North's foreign ministry has already warned that a second Korean War is "unavoidable" and threatened "pre-emptive nuclear attacks" on the United States and South Korea.
The North is not seen as having the ability to deliver a nuclear warhead to the US mainland.
South Korea, which usually shrugs off Pyongyang's fiery rhetoric, has promised to retaliate to any provocation with a precision strike on the North's leadership command.
The surge in tensions is an early challenge to South Korea's new President Park Geun-Hye, who was only sworn in two weeks ago.
Park chaired her first cabinet meeting on Monday, even though a number of key ministerial nominees - including her defence minister - have yet to be formally appointed.
On Friday, Park acknowledged that the security situation had become "very grave" but vowed to "deal strongly" with any provocation from the North.
In the meantime, the presidential Blue House said it was looking into media reports that dozens of top South Korean military officials, including ranking generals, reacted to the crisis by spending most of the weekend playing golf.