SEOUL (AFP) - South Korea Tuesday rejected North Korea's proposal that the two sides halt hostile military activities as "nonsensical", and suggested it show sincerity by dumping its nuclear weapons.

"North Korea's proposal is nonsensical and lacks sincerity," the South's unification ministry said in a statement, referring to Monday's offer from the North's top military body, the National Defence Commission (NDC).

"North Korea must show sincerity in resolving the nuclear issue, which poses a fundamental threat to peace on the Korean peninsula," the ministry said.

The NDC proposed that the two Koreas suspend hostile military activities, along with all acts of verbal provocation and slander, as of Friday.

It called for an end to live-fire drills and other hostile military activities near the disputed border in the Yellow Sea - a frequent flashpoint - from the same day.

There have been no direct military clashes at the maritime border since 2010, but the two sides intermittently fire warning shots there and engage in live-fire drills.

The North also urged the South to scrap its annual joint military exercises with the United States slated for August, to create a favourable mood for dialogue and for this year's Asian Games in the South Korean city of Incheon.

The NDC urged Seoul not to take issue with the North's nuclear weapons, calling them a "valuable" common asset.

The South, however, said the international community "knows well" that the North's development of nuclear weapons and missiles hurts regional peace.

Seoul also argued the only provocation and slander came from North Korea despite a previous agreement in January to stop such acts.

Unification Minister Ryoo Kihl-Jae said separately in parliament that the North's latest olive branch appeared to be related to Chinese President Xi Jinping's visit to South Korea Thursday and Friday.

"We cannot definitely say so, but it is quite possible," he said.

China is North Korea's sole major ally and key economic benefactor, and the fact that Mr Xi is visiting Seoul before going to Pyongyang has been seen by some as a deliberate snub.

Despite its leverage, an increasingly frustrated China has failed to persuade the North to curb its nuclear weapons programme and to stop raising regional tensions through missile and atomic tests.

Tensions between North and South Korea have been running high for months.

Most recently, the North's army threatened a "devastating strike" after the South held a live-fire drill near the maritime border.

In March the two sides fired hundreds of shells across the border into each other's waters after the North dropped shells on the South's side.