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North and South Korean naval forces exchanged fire in disputed waters off their west coast Tuesday, the first such incident in seven years. No South Korean casualties were reported, but the North Korean ship was badly damaged during the skirmish. Each navy is blaming the other for the incident, which analysts believe will heighten tensions between the two Koreas in the runup to US President Barack Obama's visit to the region, scheduled for mid-November.

According to South Korean officials, their ship issued warnings before opening fire on a vessel from the North, reports CNN.

South Korea issued three verbal warnings to ship from the Communist North once the vessel had crossed a demarcation line late Tuesday morning, said Rear Adm. Lee Ki Sik of the Joint Chiefs of Staff. The South Koreans then fired a warning shot but when the North Korean vessel continued southward, the South Koreans opened fire.

The North Koreans returned fire before heading back, their ship damaged in the exchange, Lee said.

North Korea, in turn, contends that its ship did not cross the border, reports the BBC.

In the North's version of events, a patrol boat was on a mission to confirm "an unidentified object" on the North's side of the border, and while it was sailing back, South Korean ships chased it and opened fire in a "grave armed provocation".

The North Korean vessel "lost no time to deal a prompt retaliatory blow at the provokers", [Korean Central News Agency] said. "Much flurried by this, the group of warships of the South Korean forces hastily took to flight to the waters of their side."

The BBC adds that both Seoul and Pyongyang have demanded an apology for the incident. The Koreas' standoff on the issue comes weeks after North Korea's navy accused the South of sending warships across their maritime border and threatened retaliation.

According to The Korea Times, South Korean President Lee Myung-bak asked the military to exercise restraint and prevent the incident from escalating. Lee also convened an emergency meeting of security-related ministers to further discuss the matter.

The London-based Telegraph says the clash will heighten tensions between the two Koreas ahead of President Obama's trip to Seoul, scheduled for Nov. 18.

The clash came at a time when relations between the divided nations appeared to be thawing following increased tensions earlier this year caused by North Korea's decision to test a second nuclear device in defiance of UN sanctions.

South Korean analysts speculated that the apparent provocation by Pyongyang was an attempt to serve up a timely reminder of the volatility of the Korean Peninsular to Mr Obama….

"This might be an intentional clash aimed at heightening tension ahead of [President] Obama's trip," said Kim Yong-Hyun, a professor at Seoul's Dongguk University, "I believe North Korea is trying to show Obama the volatility of the peninsula."

The incident also comes a day after the Obama administration agreed to send Stephen Bosworth, a special envoy, to Pyongyang for direct talks on nuclear issues, reports the Associated Press.

The clash is the latest in a series of armed conflicts between the navies of North and South Korea along the Northern Limit Line (NLL), a disputed maritime border, reports United Press International. (See a map of the border here.)

[The] North does not recognize the borderline imposed by the United Nations at the end of the 1950-53 Korean War. The North insists on its own maritime border far south of the NLL.

The territorial sovereignty contest triggered an armed clash in 1999 and again in 2002 when the two Koreas traded naval gunfire, leaving dozens of casualties on both sides. ...

Kim Yong-hyun, a North Korea expert at Dongguk University in Seoul, said the North could take further provocative actions to retaliate for Tuesday's clash that left the North's boat badly damaged. "Tension along the NLL is expected to run high for the time being," he said.