North Korea has issued strong warnings to South Korea as inter-Korean dialogue remains at a standstill.

The North’s state-run Korean Central News Agency said in a statement Thursday that the Lee Myung-bak government and South Korean military have raised tensions on the Korean Peninsula. It warned such tensions could lead to a third naval clash in the West Sea or a second Korean War.

The statement said the North wants inter-Korean ties to develop and to establish peace and prosperity on the Korean Peninsula. However, it was quick to add that the communist state was not afraid of a military clash or war.

The news agency also warned that the more tensions rise the further inter-Korean ties will be jeopardized. It added that such tensions would negatively impact efforts to resolve the nuclear standoff and to revitalize the South Korean economy.