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South Korea exchanged machinegun fire with North Korea Thursday in the Demilitarised Zone, the divided peninsula's heavily fortified frontier, the South's Joint Chiefs of Staff said in a statement.

The rare shooting -- the last was in November 2001 -- took place as the United States and China searched for a way to persuade North Korea to enter into talks on Pyongyang's pursuit of nuclear weapons. The North has in the past raised tensions before climbing down to a compromise or concession.

The statement said North Korea fired four shots at a South Korean army position in the DMZ in the center of the peninsula around 6:10 a.m. (5:10 p.m. EDT on Wednesday). The South answered with a warning broadcast and returned fire with 17 shots, the statement said.

"The Joint Chiefs of Staff is investigating whether the North Korean side intentionally fired their weapons," it said.

No one was wounded on the South side, the statement added.

Financial markets were closed in South Korea Thursday for a public holiday, Constitution Day. South Korean markets were badly hit after the nuclear crisis first flared last October.

There was no immediate report on the exchange in North Korea's official media and the United States military in Seoul declined to comment. The South Korean Defense Ministry said it would hold a news conference on the incident.

The nuclear crisis erupted last year when U.S. officials said North Korea had said it was pursuing a secret nuclear arms program, which the United States fears could threaten its allies in the region and destabilize Northeast Asia.

The last shooting incident along the DMZ, a heavily mined no man's land that bisects the peninsula, took place in November 2001 at a point on the frontier north of Seoul.

The navies of the two Koreas engaged in a deadly firefight along their disputed maritime border in June 2002. Six South Korean sailors and an estimated 13 Northern seamen were killed.

North and South Korea are technically at war after their 1950-53 conflict, pitting U.S.-led United Nations Forces and North Korea, ended in an armed truce.

July 27 -- just 10 days away -- marks the 50th anniversary of the signing of the truce and a major commemorative event is scheduled to be held in the Panmunjom enclave on the southern side of the DMZ with veterans and dignitaries.

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