The two Koreas briefly exchanged naval fire yesterday along their disputed western sea border, with a North Korean ship suffering heavy damage before retreating, South Korean military officials said, as cross-border tensions rose a week before a scheduled US presidential visit.

There were no South Korean casualties, the country's Joint Chiefs of Staff said in a statement, and it was not immediately clear if there were any casualties on the North Korean side. Each side blamed the other for violating the sea border.

The clash the first of its in kind in seven years occurred as US officials said President Barack Obama has decided to send a special envoy to Pyongyang for rare direct talks on the communist country's nuclear weapons program. No date has been set but it would be the first one-on-one talks since Obama took office in January. Obama is due in Seoul next week

"It's a regrettable incident," South Korean Commodore Lee Ki-sik told reporters in Seoul. "We are

sternly protesting to North Korea and urging it to prevent the recurrence of similar incidents."

North Korea's military issued a statement blaming South Korea for the "grave armed provocation," saying its ships crossed into North Korean territory.

The North claimed that a group of South Korean warships opened fire but lied after the North's patrol boat dealt "a prompt retaliatory blow." The statement, carried on the official Korean Central News Agency, said the South should apologize.

South Korean President Lee Myung-bak, who convened an emergency security meeting, ordered his defence minister to strengthen military readiness.

South Korea's Joint Chiefs of Staff said in a statement that a North Korean patrol boat crossed the disputed western sea border around 11.27 am (0227 GMT), drawing warning shots from a South Korean navy vessel. The North Korean boat then opened fire and the South's ship returned fire before the North's vessel sailed back toward its waters, the statement said.