The Republic of Korea marked on Friday the anniversary of the 2010 shelling of a border island with a military drill and memorials, clouded by the threat of a fresh attack from the Democratic People's Republic of Korea.

The shelling of Yeonpyeong Island killed two ROK marines and two civilians in one of the most serious border incidents since the 1950-53 Korean War.

The DPRK defended the shelling as an act of self-defense against a joint drill between the ROK and the United States near the western maritime border called the Northern Limit Line.

The DPRK refuses to acknowledge the NLL, which was drawn unilaterally by the US-led United Nations Command at the end of the 1950-53 Korean War.

In the two years after the 2010 shelling, most of the islanders who fled with the intention of resettling on the mainland have returned.

But their home has changed dramatically and now bristles with new fortifications, a three-fold increase in troop numbers and the regular wail of warning drills.

"Some say they still can't sleep well at night, can't breath well or their heartbeat gets faster when the sirens go off," Park Kil-soon, a local doctor, told AFP.

On Friday, the ROK military conducted simulated and field exercises in and around the island involving the Marine Corps, Navy and Air Force.

ROK defense officials stressed that no live artillery rounds were used.

A new museum was inaugurated in Yeonpyeong, featuring photos, 3D images and videos detailing the 2010 shelling and incorporating the wreckage of two shelled homes, with charred children's bicycles and other items.

In Seoul, ROK Prime Minister Kim Hwang-sik led a service at the city's War Memorial, during which he spoke of the "reckless brutality" displayed by the shelling.

The DPRK military on Thursday threatened another attack on the island, saying its only regret was not sending Yeonpyeong "to the bottom of the sea" two years ago.

"It is (our) steadfast will ... not to miss the opportunity to do so if the warmongers perpetrate another provocation," an army spokesman said.

Choi Ok-sun, a 30-year resident who owns an inn on the island, initially moved to the mainland port city of Incheon after the shelling with the intention of starting a fresh life.

But within a year, she was back on Yeonpyeong.

"Where else can you go after spending nearly all your life here?" she said.

Many were lured back by a mini-boom in the local economy, as the authorities rushed to reconstruct shattered homes and build new ones for workers, troops and their families.

"It was really scary back then and everyone was so worried about their livelihood, but now things have improved in that sense," Choi said.