On August 10 a brief firefight broke out between North and South Korea in the West (Yellow) Sea. The initial South Korean news-agency report was hedged:

South Korea fired three shots towards the tense western sea border after one North Korean shell apparently fell near there, the military here said. The Joint Chiefs of Staff (JCS) said the South's Navy heard North Korea fire three artillery shots toward the Northern Limit Line (NLL) around 1 p.m. and then responded around 2 p.m. with three warning shots. ‘We estimated that one North Korean shell dropped near the NLL,’ a JCS official said. “We haven’t noticed any particular movements in the North Korean military but we’re maintaining a defense posture."

It is not clear if any of the original rounds fell south of the NLL or where South Korea’s shots fell. A few more rounds were exchanged later in the day. Washington and Seoul were quick to accuse North Korea of a provocation. An annual joint U.S.-South Korean exercise to begin this week was scarcely mentioned.

Accusations of North Korean provocations ignore the precarious military balance in Korea and the parlous political context on the peninsula at this time.

North Korea’s armed forces are inferior to South Korea’s—on land, in the air and at sea. Although a North Korean surprise attack cannot be ruled out, the allies are confident they would defeat it decisively. Any use of nuclear arms by the North would be nothing short of suicidal. For its part, Pyongyang can credibly threaten devastation of much of Seoul within range of its artillery and short-range missiles, which should suffice to deter an attack by South Korea. In short, mutual deterrence makes the likelihood of deliberate aggression on the peninsula quite low. Yet the very steps that each side has taken to deter premeditated war have increased the risk of deadly clashes, if not inadvertent war.

Politically, the current tension dates back to 2008, after South Korean President Lee Myung-bak backed away from a potentially far-reaching summit agreement signed by his predecessor with North Korea’s leader Kim Jong-il that included a pledge “to discuss ways of designating a joint fishing area in the West Sea to avoid accidental clashes and turning it into a peace area and also to discuss measures to build military confidence.” Determined to display toughness toward North Korea, Lee also abandoned engagement and prevailed on Washington to do likewise. Disengagement by Washington and Seoul has never gone down well in Pyongyang. The most dangerous crises have come when Seoul blocked engagement between Washington and Pyongyang. Even worse, with transition to a new generation of leadership under way in Pyongyang, loose talk about impending collapse of the North Korean regime was ominously rife in Seoul.

Lee’s renege drew a bristling response from Pyongyang. In late March 2008, after building up its shore artillery near the West Sea, it accused South Korean vessels of violating “its” territory and launched short-range missiles into the disputed waters, underscoring the risks of leaving the issue unresolved. It also called for a permanent peace treaty to replace the armistice agreement, a step that the Lee government was loath to take.

The waters off Korea’s west coast have been troubled ever since the end of the Korean War in 1953, when the U.S. Navy unilaterally imposed a ceasefire line at sea north of the Military Demarcation Line (MDL) on land. North Korea has long objected to this Northern Limit Line, which is not recognized internationally either. It wants the MDL line extended out to sea.

A heated war of words erupted in 2009. On January 17, assailing South Korea’s defense minister “for making full preparations for the possible third West Sea skirmish,” a North Korean military spokesman warned, “[W]e will preserve … the extension of [the] MDL in the West Sea already proclaimed to the world as long as there are ceaseless intrusions into the territorial waters of our side in the West Sea.” Not to be outmuscled, South Korea’s defense minister told the National Assembly a month later that it “will clearly respond to any preemptive artillery or missile attack by North Korea” in the contested waters.

To navies on both sides, the message was shoot first and ask questions later.

In August 2009 Pyongyang reached out to reengage with Seoul. Kim Jong-Il sent his two top aides dealing with North-South relations to Seoul for Kim Dae-jung’s funeral with a personal invitation for Lee to a third North-South summit meeting. But Lee, mistaking the gesture as a sign of weakness, spurned the invitation.

With little to show for his efforts to reengage, Kim Jong-il turned up the heat. On October 15 the North Korean Navy accused the South of sending sixteen warships into the contested waters, according to a report by North Korea’s Korean Central News Agency, which said, “The reckless military provocations by warships of the South Korean Navy have created such a serious situation that a naval clash may break out between the two sides in these waters.”

On November 9, 2009, just such a clash took place—precisely what the 2007 summit accord had sought to forestall. After a North Korean patrol boat crossed the NLL, a South Korean naval vessel fired warning shots at it. The North Koreans returned fire and the South Koreans opened up, severely damaging the North Korean ship and causing an unknown number of casualties, including at least one death. What prompted the North Korea patrol boat to respond to the warning shots? Did the crew believe it was under attack?

North Korea’s attack on the Cheonan was reprisal for the November 9 exchange of fire. On November 12, after Pyongyang’s demand for an apology went unanswered, the party newspaper, Rodong Sinmun, warned it would avenge the attack: “The South Korean forces will be forced to pay dearly for the grave armed provocation perpetrated by them in the waters of the north side in the West Sea of Korea.” Five days later, according to North Korean accounts, Kim Jong-il went to a naval base with his high command and ordered the training of a “do-or-die unit of sea heroes.” That order was carried out on March 26 with the attack on the Cheonan, killing forty-six South Korean seamen, an attack for which Pyongyang has since denied responsibility. Why did Pyongyang opt for reprisal? Given the precarious state of the military balance from its vantage point, it needed to restore deterrence.

More trouble was in the offing. Seoul moved to bolster deterrence by conducting a series of military exercises. Trying to reassure Seoul yet restrain it, the United States joined in some exercises—but not those in the contested waters of the West Sea. On August 9, 2010, the North Korean artillery fired 110 rounds into those waters after the South completed a five-day exercise in the area.

On October 29 a North Korean soldier at a guard post at the DMZ dropped his machine gun, which misfired, and South Korean troops returned fire.

Later that fall, after Seoul announced it would conduct a series of live-fire exercises in the West Sea, Pyongyang used the hotline to warn it not to proceed. When the South Koreans, undeterred, went ahead on November 23, the North Koreans, instead of striking in the heat of the moment, waited for over an hour before shelling Yeonpyeong Island. The delay suggests that Pyongyang’s response was deliberate, countering South Korean muscle-flexing with more of its own to bolster deterrence. The ensuing artillery exchange killed four South Koreans, two of them civilians, and an unknown number of North Koreans.

Events this year revealed just how precarious the military situation has become. After misidentifying it as one of the communist North's jet fighters, South Korean marines fired at an Asiana Airlines jet carrying 119 passengers and crew on a flight from China making its descent to Incheon Airport on June 17, 2011. The plane landed unharmed. Last week’s brief firefight was the latest pernicious interaction.

Washington and Seoul have been full of talk about the need to deter future Cheonans, but it is not clear how they plan to do so. To the contrary, steps taken to bolster deterrence can—and do—provoke clashes. In short, deterrence alone will not keep the peace on the peninsula.

The only way out is a peace process, which may help with denuclearization as well. For over two decades Pyongyang has said it wants a peace treaty to replace the armistice that terminated the Korean War. Such a treaty could reduce the risk of military clashes on the peninsula. It would also be a long-sought manifestation of reconciliation—an end to enmity—with Washington and Seoul. It is inconceivable that Pyongyang would give up its nuclear and missile programs or arms without such an agreement. As long as America and South Korea remain its foes, it will feel threatened and want deterrents to counter that threat.

Negotiating a peace treaty is a formidable task. To be politically meaningful, it would require rectification of permanent land and sea borders and normalization of diplomatic and economic relations. To be militarily meaningful, it would require changes in force postures and war plans that pose excessive risks of unintended war on both sides of the Demilitarized Zone. That would require redeployment of the North’s forward-deployed artillery and short-range missiles to the rear, out of range of Seoul.

A peace treaty is unlikely in the absence of a more conducive political environment. One way to accomplish that is a peace process, conducting a series of interim peace agreements as stepping stones to a treaty. Such agreements, with both the United States and South Korea as signatories, would constitute token recognition of D.P.R.K. sovereignty.

They could also be linked to steps toward denuclearization. Such linkage was envisioned by the six parties in the September 2005 Joint Statement which read, “The directly related parties will negotiate a permanent peace regime on the Korean Peninsula at an appropriate separate forum.”

A first step could be what Seoul once called a “peace declaration.” Signed by the United States, North and South Korea and perhaps China, Japan and Russia as well, such an declaration could declare an end to enmity by reiterating the language of the October 12, 2000 U.S.-D.P.R.K. joint communiqué stating that “neither government would have hostile intent toward the other” and confirming “the commitment of both governments to make every effort in the future to build a new relationship free from past enmity.” It could also commit the three parties to commence a peace process culminating in the signing of a peace treaty. The declaration could be issued at a meeting of six-party foreign ministers.

A second step long sought by Pyongyang is the establishment of a “peace mechanism” to replace the Military Armistice Commission set up to monitor the ceasefire at the end of the Korean War. This peace mechanism could serve as a venue for resolving disputes like the 1994 North Korea downing of a U.S. reconnaissance helicopter that strayed across the DMZ or the 1996 incursion by a North Korean spy submarine that ran aground while dropping off agents. The peace mechanism would include the United States and the two Koreas—the three parties with forces on the ground in Korea. China, which would be a signatory to any peace treaty, might opt to participate as well.

The peace mechanism could also be the venue for negotiating a series of agreements on specific confidence-building measures. The joint fishing area in the West Sea is one. Naval confidence-building measures such as “rules of the road” and a navy-to-navy hotline are also worth pursuing.

Lacking satellite reconnaissance, North Korea has conducted surveillance by infiltrating agents into the South. An “open skies” agreement allowing reconnaissance flights across the DMZ by both sides might reduce that risk. In October 2000 Kim Jong-il offered to end exports, production, and deployment of medium- and longer-range missiles. In return he wanted the United States to launch North Korean satellites, along with other compensation. A more far-reaching arrangement might be to set up a joint North-South watch center that would download real-time data from U.S. or Japanese reconnaissance satellites.

North Korea, in return, would have to reciprocate step by step with permanent dismantlement of its nuclear and missile facilities.

When the subject of North Korea comes up in Washington these days, it sets off a wave of speculation by so-called experts about whether Pyongyang is willing to dismantle its nuclear and missile programs and give up its arms. Their time would be better spent thinking about what inducements Washington, Seoul and others might offer to obtain those results.

Foremost among those inducements is a peace process.

Many observers believe North Korea provokes incidents to justify tight control at home. This assessment ignores the pernicious strategic interaction between the two sides of the Korean dividing line. North Korea says it wants peace. Let’s test it to see if it means what it says.