Military delegates from North and South Korea are holding held high-level military talks in the truce village of Panmunjom in the demilitarised zone amid rising tensions in the peninsula, according to South Korean media reports.

The rival Koreas will engage in talks for the first time in nearly seven years after their respective navies exchanged warning shots along the disputed sea boundary last week.

"The inter-Korean general-level military talks got underway from 10am at the truce village of Panmunjom. The North does not want to make it public," a South Korean source told Seoul's Yonhap news agency.

None of the South Korean ministries have made an official comment on the matter as yet. It is also unclear who the high-ranking military officials from the two countries are, or the agenda of the meeting.

There have been mixed signals from North Korea in recent weeks over its responses to the South.

A high-level political delegation, which includes Pyongyang's second most-powerful man, made a surprise visit to South Korea to take part in the Asian Games ceremony.

However, within days the two countries' patrols traded warning shots along the disputed sea border. Subsequently, the North also attacked the propaganda balloons released by anti-Pyongyang activists, and machine-gun fire was exchanged by the two nations.