* North Korea firing near disputed maritime border
* South returns fire into water, scrambles jets
* Firing not seen as prelude to serious conflict (Adds comments, details)
By Jack Kim
SEOUL, March 31 (Reuters) - North Korea fired artillery close to a disputed maritime border with the South on Monday, prompting the South to fire back, although the military exercise appeared to be yet more sabre rattling from Pyongyang rather than a prelude to a sharp rise in tensions.
The North had flagged its intentions to conduct the firing exercise in response to U.N. condemnation of last week's missile launches by Pyongyang and against what it says are threatening military drills in the South by U.S. forces.
North Korea also accused the South of "gangster-like" behaviour at the weekend by "abducting" one of its fishing boats and threatened to retaliate. The South said it had sent the boat back after it drifted into its waters.
One North Korean shell landed in South Korean waters, prompting marines from the South to fire back and Seoul scrambled F-15s on its side of the maritime border, according to defence officials in Seoul.
"It's up to the two militaries either to recognise or reject their own claimed line, and challenge the other's - this goes back and forth, so this is probably another episode of that," said Daniel Pinkston of the International Crisis Group.
The Northern Limit Line, a maritime border that wraps itself round a part of the North's coastline, has been the scene of frequent clashes and in 2010, four people were killed when North Korea shelled the South Korean island of Yeonpyeong.
Earlier that year, a South Korean naval vessel was sunk close to the line by what an international commission said was a North Korean torpedo, although the North denies involvement.
The line was drawn up at the end of the 1950-53 Korean War and North Korea does not recognise it. The two sides are still technically at war as the conflict ended in a mere truce, not a treaty.
It was not clear how many shells were fired on Monday but the residents of Baengnyeong island, the closest land to the firing area, were evacuated to bomb shelters as a precaution, a local government official said by telephone.
North Korea has ratcheted up its rhetoric in recent weeks and conducted a series of missile launches, mostly short range, in response to what it sees as the threat posed by a series of joint U.S.-South Korean military drills that are held annually.
The current drill called Foal Eagle ends on April 18.
"At a time that South Korea and the United States are conducting military exercises using sophisticated equipment, the North is unlikely to be reckless enough to do anything that will lead to a sharp worsening of situation," said Yang Moo-jin, a professor at the University of North Korean Studies in Seoul.
North Korea threatened nuclear strikes against the South and the United States last year after the United Nations tightened sanctions against it for conducting its third nuclear test.
Financial markets in South Korea were unmoved by the news with the stock market's benchmark KOSPI turning higher from early losses to finish up 0.2 percent and the won extending gains to end onshore trade up 0.4 percent against the dollar. (Additional reporting by James Pearson, Ju-min Park, Choonsik Yoo and Narae Kim; Editing by Nick Macfie)