South Korean and U.S. troops are staging their joint annual exercises from Monday until March 21, incensing North Korea

But a South Korean military source on Sunday said no unusual troops movements have been observed in North Korea.

The drills, dubbed Key Resolve, are a joint annual simulation exercise that Seoul and Washington have staged since 1994. This year, the South Korean Joint Chiefs of Staff rather than the Combined Forces Command take the lead in preparation for the handover of full operational control of Korean troops to Seoul in 2015.

Some 10,000 South Korean and about 3,500 U.S. troops are participating in this year's drills.

The guided missile destroyers USS Lassen (DDG 82) and USS Fitzgerald (DDG62) enter a port on the east coast on Saturday. The destroyers take part in a naval drill which is part of annual joint military exercise by the U.S. and South Korea. /Courtesy of Korean Navy

The South Korean and U.S. militaries notified North Korea of the dates through the truce village of Panmunjom on Feb. 21.

In response, the North threatened to scrap the armistice that halted the 1950-1953 Korean War and cancel a bilateral non-aggression pact.

On March 5, it also threatened to close hotlines between the UN Command and the North Korean army and on March 8 to close another hotline in Panmunjom. But the regime has taken no measures so far.

"It's possible that the North will launch a surprise provocation," a military source here said.

The South Korean military has stepped up surveillance of the North and upgraded its military preparedness. North Korea also looks poised to stage a massive military drill of its own in Wonsan, Kangwon Province.