North and South Korea traded verbal volleys Thursday, a day after an artillery exchange in waters near their Yellow Sea border caused tensions to spike.

North Korea, in a statement released on its official news agency, flatly denied South Korean charges that it fired off a handful of artillery shells, sparking Wednesday's exchange. It said the South must have been confused by blasting at a construction site near the border.

South Korean officials responded there is no doubt that the North fired the shots, and dismissed its claims as typical of a country that routinely denies its provocations.

U.N. Secretary General Ban Ki-moon, speaking to reporters in Seoul on Thursday, said the artillery exchange left him concerned and regretful. He said the exchange shows the situation on the Korean peninsula remains unstable.

In Washington, U.S. officials indicated the exchange should not stand in the way of efforts to re-engage North Korea in discussions about its nuclear weapons programs.

A State Department spokeswoman said Wednesday that the incident “is now over, and we need to move back to the main business at hand.”

North Korea said on the KCNA news agency it was “preposterous” in an age of modern technology that the South would mistake routine construction work for artillery fire.

But South Korea's military rejected the North's comment, saying five North Korean shells were fired and at least two fell very close to the border. It said at least some of the shots were observed from a front-line border post.

South Korea says it responded with warning shots of its own, which also fell harmlessly into the sea.

The exchange took place near Yeonpyeong island, which was attacked by Pyongyang in November while South Korean marines were conducting an artillery exercise. Two marines and two civilians were killed.