Lee however said the South is ready to talk to its neighbour with an "open heart" if Pyongyang is also willing to talk sincerely.

The North has fiercely criticised Lee's conservative government as "traitors" in the run-up to a general election in the South in April and a presidential poll in December.

"The North is trying to influence the election by sparking various feuds within the country (South Korea)," the president told a press conference marking the fourth anniversary this week of his inauguration.

"The South's voters are not swayed by such things. There is nothing to be gained for the North by creating conflicts in the South."

Lee scrapped a "sunshine" policy of aid and engagement practised by previous centre-left governments. He linked major aid to nuclear disarmament, a stance which infuriated Pyongyang.

His government has said there is a "window of opportunity" for better relations following the death of the North's longtime leader Kim Jong-Il, and the takeover by his son Jong-Un.

Jong-Un's regime has however rejected several offers of dialogue from Seoul.

Lee reiterated that the North's society was going through great changes but did not elaborate. "North Korea is at an opportune time for change but we need to wait a little while," he said.

In the latest incident following two years of high tensions, the North's military threatened a possible attack in retaliation for a South Korean artillery exercise near the disputed Yellow Sea border.

Monday's drill passed without incident.

"When it comes to the North Korean defectors, it is right for the Chinese government to handle them in line with international rules as long as they are not criminals," Lee told a press conference in his first comment on the issue.

Seoul's foreign ministry, legislators and activists are urging Beijing not to send a group of recently arrested fugitives from the North back to their homeland.

Activists say returnees face severe punishment or even the death sentence.

China Tuesday reiterated its stance that the fugitives from the North are illegal economic migrants. Rights groups insist they are refugees deserving protection.

"The relevant people entered China illegally due to economic reasons. They are illegal border crossers, they are not within the category of refugees," foreign ministry spokesman Hong Lei told reporters.

"This issue does not fall under the relevant UN mechanism."

South Korea has said it will seek UN support to try to prevent those recently detained from being sent back.

Activists and lawmakers in Seoul say around 30 North Koreans will be repatriated. The South's foreign ministry has only confirmed that 10 are in danger of being returned.

More than 21,700 North Koreans have fled to the South since the 1950-1953 war, the vast majority in recent years.

They typically escape on foot to China, hide out and then travel to a third country to seek resettlement in the South.

A separate group of 11 North Korean refugees has been trapped in South Korean consulates in Beijing and Shenyang for almost three years because China refuses to let them leave for the South.