North Korea's military told South Korea to apologise for a "grave armed provocation" after their navies exchanged fire on Tuesday near the disputed Yellow Sea border.

"The South Korean military authorities should make an apology to the North side for the armed provocation and take a responsible measure against the recurrence of the similar provocation," the military supreme command said.

The command, in a report on what it called a "grave armed provocation", said its patrol boat was on a mission to confirm "an unidentified object" on the North's side of the border.

While it was sailing back, South Korean warships chased it and opened fire, according to the report quoted by the North's Korean Central News Agency. It said the North's craft "lost no time to deal a prompt retaliatory blow at the provokers.

"Much flurried by this, the group of warships of the South Korean forces hastily took to flight to the waters of their side."

Seoul's military also demanded an apology, saying the North's boat opened fire on a South Korean patrol boat. Officials said no South Koreans were hurt while the North's boat was set ablaze and sailed back.

The incident came as the North is putting out peace feelers to its neighbour following months of tensions. Analysts said its military statement was relatively mildly-worded.