North and South Korea traded fire Friday after the North shot at a South Korean propaganda balloon, an official and a news report said.

A defense official in Seoul said North Korea fired at South Korea and some of the shells fell on the South's territory. The official, who spoke on condition of anonymity because of office rules, said South Korea returned fire.

The firing comes as speculation grows about what is happening with North Korea's authoritarian leader, Kim Jong Un, who has been out of public view for more than a month. He missed a major anniversary event on Friday for the first time in three years.

South Korea's Yonhap news agency said the North fired at the propaganda balloon near the South Korean border town of Yeoncheon. It provided no sources for the information.

South Korean activists and North Korean defectors frequently release balloons carrying anti-North Korean leaflets into the North, but Friday's action was likely to anger North Korea more because it came on the founding anniversary of its ruling Workers' Party of Korea.

South Korean civic organizations mainly made up of North Korean defectors sent 10 balloons northward from the South Korean side of the border containing 20,000 anti-North Korea leaflets. The balloons also contained 1,000 U.S. $1 bills, 400 propaganda DVDs and 300 propaganda thumb drives.

North Korea's Secretariat of the Committee for the Peaceful Reunification of Korea released a statement on Thursday criticizing the planned leaflet launch, calling it "little short of a declaration of a war."

"If the South Korean authorities allow or connive at the projected leaflet-scattering operation, the north-south relations will again be pushed to an uncontrollable catastrophe and the provokers will be wholly accountable for it," the statement said.