South Korea's presidential office has condemned the powerful sister of North Korean leader Kim Jong Un for making rude and "senseless" remarks against President Moon Jae-in, in a heated war of rhetoric following Pyongyang's unilateral destruction of an inter-Korean liaison office.

Cross-border tension escalated yesterday as the belligerent North threatened to redeploy troops to two inter-Korean zones, rebuild demolished guard posts, and resume military exercises along the border.

These acts would nullify an inter-Korean military agreement signed in September 2018 to reduce tension along the border.

The regime also refused to receive special envoys from the South.

"We warn that we will no longer tolerate North Korea's reckless words and actions," South Korea's presidential spokesman Yoon Do-han said at a briefing, adding that the moves harm mutual trust between their two leaders.

He was referring to a statement by Mr Kim's sister Yo Jong, which criticised Mr Moon's conciliatory speech on Monday to mark 20 years of inter-Korean relations.

She described his remarks as "shameless sophistry" filled with "flowery rhetoric" and accused him of "pro-US flunkeyism" - the latest in a series of insults she hurled towards the South since early this month for allowing North Korean defectors to release anti-Pyongyang propaganda balloons across the border.

Mr Yoon also chided Pyongyang for its "unprecedentedly senseless act" of saying that Mr Moon had "begged" the regime to receive his special envoy - either national security director Chung Eui-yong or National Intelligence Service director Suh Hoon.

Separately, the South Korean military warned that the North will "pay the price" if it carried out its military threats, adding that the moves would "thwart two decades of efforts by South and North Korea to improve inter-Korean ties and maintain peace on the Korean peninsula".

In a statement, the Joint Chiefs of Staff also said they are closely monitoring North Korea's military moves round the clock and maintaining combat readiness. "We will continue to manage the situation and prevent it from escalating into a military crisis," the statement said.

Yet Pyongyang's verbal attacks show no sign of abating, triggering fears that the situation could escalate into military action.

The regime has already called South Korea an "enemy" and cut off all inter-Korean communication before proceeding to blow up the liaison office on Tuesday, in an apparent attempt to create a crisis to force Seoul and Washington to resume stalled nuclear talks.

Yesterday, the state-owned Korean Central News Agency (KCNA) accused South Korea of breaching inter-Korean agreements first and "doing all sorts of hostile acts including war exercise against the North" and allowing "human scum defectors from the North" to release balloons carrying anti-Pyongyang messages.

The KCNA also urged South Korea's presidential office and Defence Ministry to "control their tongues" or face catastrophic results. "Wrong words and actions are bound to bring ensuing result. It can be the story of setting Seoul on fire that was raised long ago or more horrible threats," it said.

Meanwhile, the US State Department said it "fully supports" South Korea's efforts on inter-Korean relations and urged the North to "refrain from further counterproductive actions".

South Korea's Reunification Minister Kim Yeon-chul, however, has offered to resign to take responsibility for the worsening of inter-Korean ties.

He apologised for "failing to live up to the demands and expectations of our people for peace and prosperity on the Korean peninsula".

Dr Lee Seong-hyon of the Sejong Institute think-tank said the destruction of the liaison office is viewed as "public display of failure" of Mr Moon's engagement policy towards the North.

"Moon has invested so much of his political capital in improving inter-Korean relations, but now his presidential legacy is becoming fluid and uncertain," he told The Straits Times.

Other analysts warned that North Korean provocations will continue.

Ms Jessica Lee, senior research fellow on East Asia for the Quincy Institute, said Pyongyang takes extreme measures to "increase tensions on the peninsula and raise the stakes for future negotiations".

"The more desperate Kim Jong Un feels, the more likely he'll be to lash out at South Korea and the United States in an effort to force a change in attitudes," she added.