The South Korean and US militaries Monday began an annual major joint exercise to test defences against North Korea, a drill denounced by Pyongyang which vowed to strengthen its nuclear deterrent.

A South Korean army officer with a rifle is positioned for ambush during a drill to test defences against North Korea in Seoul on August 20.

Seoul's defence ministry could not say how many South Korean troops were taking part but Yonhap news agency put the number at 56,000.

The drill does not involve field training and is largely a computer-simulated exercise, with troops staying at their normal bases.

US and South Korean forces insist it is defensive while the North Monday called it a drill for a preemptive nuclear attack.

"The prevailing situation requires (North Korea) to bolster up the war deterrent physically and goes to prove that it was entirely just when it determined to fully reexamine the nuclear issue," the North's foreign ministry said.

The war deterrent "serves as a just means for retaliation", it said in a statement published by state media.

"This is an all-powerful treasured sword for protecting the sovereignty of the country and a powerful means for deterring the war on the Korean peninsula," the ministry said.

General James Thurman, commander of the 28,500 US troops based in the South, called Ulchi Freedom Guardian "a key exercise in strengthening the readiness of Republic of Korea (South Korean) and US forces".

On the eve of the exercise, the North's leader Kim Jong-Un visited a frontline artillery unit that carried out the deadly 2010 bombardment of a South Korean island near the disputed western sea border.

Kim praised its personnel as heroes and told them never to tolerate enemy aggression, the North's official news agency reported Saturday.

The two Koreas have remained technically at war since their 1950-53 conflict ended in an armistice, without a subsequent peace treaty.

Cross-border tensions have been high since the South accused the North of torpedoing one of its warships with the loss of 46 lives in March 2010.

The North denied the charge but shelled the border island in November that year, killing four South Koreans.

About 20 activists gathered outside the biggest US army base in Seoul's Yongsan district to protest at the exercise, displaying banners reading "Stop UFG (Ulchi Freedom Guardian)!" and "Sign Peace Treaty".

"This is a war game and a physical threat to the North," they said in a statement, adding that the drill heightens tensions on the peninsula.