SEOUL (Reuters) - South Korea announced land and sea military exercises on Wednesday including its largest-ever live-fire drill near North Korea just as tension on the peninsula was beginning to ease after Pyongyangs attack on a southern island. The land drill, involving three dozen mobile artillery guns, six fighter jets, multiple launch rocket systems and 800 troops, the largest number of personnel in a single peace-time exercise, will take place on Thursday and is likely irritate the North. The scale of the drill and the timing, coming right after the tensely staged a live-fire exercise on Monday, indicate South Koreas conservative President Lee Myung-bak sees more political mileage in taking a tough military stance rather than reverting to dialogue, despite overtures from Pyongyang. Lees government was heavily criticised at home for a perceived weak response to North Koreas shelling of the southern island of Yeonpyeong last month. Well be sure to deal a punishing blow if the North tries to repeat the kind of situation like the artillery shelling of Yeonpyeong, Brigadier General Ju Eun-shik said in a statement. There was no immediate reaction from North Korea. State news agency KCNA, which regularly denounces the South, United States and Japan, made no mention of the drills, although it carried an article lambasting a US lawmaker critical of Pyongyang as human scum and a political illiterate. South Korea is also holding three days of live-firing naval drills off the peninsulas east coast starting on Wednesday, a media official at the Defence Ministry said. He would not provide details. Yonhap news agency said the drills were taking place 100 km (60 miles) south of the maritime border with North Korea and involved at least six naval vessels. North Korea this week offered to re-admit UN inspectors concerned about its nuclear-weapon programme, leading to speculation of a resumption of six-party disarmament talks and a general sense of relief that the crisis had passed. The drills are an indication that (the South) is aiming to keep tensions very high, partly because of the possibility of the North striking back, said Kim Yong-hyun of Dongguk University. Dialogue is clearly not high on the agenda. Its still very much in the mode of how they can respond to incidents like the one on Yeonpyeong and to show that response in the future will be overwhelming. The South Korean Army is making no secret that the drill is aimed at displaying its firepower to its neighbour. Yes, it will be a show of force against that, an army officer said, when asked if the shelling of Yeonpyeong last month was a factor in the land drills planning. He said similar drills had been staged previously on more than 50 occasions, but the scale this time was unprecedented. The scale of mechanised assets taking place is enormous. When we would normally have 6 K-9 mechanised artillery, well have 36. Well have the F-15 jets firing. Well have choppers. You can say most of the mechanised assets taking part will be firing live ammunition. It will take place in the Pocheon region, less than 50 km (30 miles) north of downtown Seoul. The latest crisis peaked when North Korea shelled Yeonpyeong, just south of the disputed maritime border, killing four people - including two civilians - in the worst attack on South Korean territory since the end of the civil war in 1953. The South carried out live-fire drills on Yeonpyeong on Monday, which provoked only a verbal reaction from the North. It had vowed to strike back if the South went ahead with the drills, prompting fears of all-out war. China, North Koreas only major ally, has urged dialogue to resolve the crisis and urged Pyongyang to follow through on its offer to allow UN inspectors into the country. The Chinese Foreign Ministry had no immediate comment on the planned drill. Analysts say the North is unlikely to undertake another hostile act like this years attack on South Koreas Cheonan warship, blamed on the North by the United States and the South, and the Yeonpyeong shelling, at least in the near term. Its most likely next move would be to conduct live-fire artillery drills or possibly a short-range missile test into its waters off the west coast. Analysts have said they believe its recent military acts were aimed at bolstering the ruling family as ailing leader Kim Jong-il grooms his youngest son, Kim Jong-un, as his successor. North Korea likes to step towards the brink and then away from it again, said Brian Myers, an expert on the North at South Koreas Dongseo University. The news from Pyongyang in the past few days indicates that the Kim Jong-il regime is now in the backing-off part of its usual cycle. He said the North probably did not expect the South to go through with live-fire exercises on Monday. If it had, it would not have made such loud threats of reprisal in its domestic media. After the exercises took place, the Kim regime had to tell its own people that the Souths 'provocation was not worth responding to, a flip-flop it cannot afford to repeat in just a few days. I dont expect the North to be quite as vocal about the next round of exercises. South Korean Finance Minister Yoon Jeung-hyun, speaking before the announcement of the drill, said domestic financial markets had weathered the crisis and the South Korean economy, Asias fourth-largest, stayed on a growth track. But he warned that the tension could still dent consumer spending with a key sentiment measure due on Friday. South Korean markets were unaffected by the tensions with foreign investors buying into stocks and bond futures. Traders said earlier that the won currency was generally being affected more by concern over the euro zone. Consumers and businesses in South Korea say they have lived with tension on the divided peninsula for years and markets do not always react, although the recent crisis had rattled global markets and remained an underlying risk.