Seoul, March 27 (IANS): North Korea announced on Friday the arrest of two South Korean "spies" or "terrorists" alleged to have gathered confidential information and acted to "destabilise" the country, Efe news agency reported.

The Communist regime presented two men, identified as Kim Kuk-gi and Choe Chun-gil, to a press conference in Pyongyang, and charged them with attempting to "harm the Supreme Leader (of North Korea)", reported state news agency KCNA.

"They zealously took part in an anti-DPRK (anti-North Korea) smear campaign, organised by US intelligence and the South Korean National Intelligence Service (NIS)," KCNA said.

Photos and a video published in North Korea allege to show the two men confessing their crimes to authorities in the People's Palace of Culture in Pyongyang.

North Korea accuses the two of exchanging substantial foreign currency for confidential information about the country, the Workers' Party and the People's Army, on behalf of the NIS, and of various activities aimed at destabilising Kim Jong-un's regime.

Meanwhile, the Seoul government refuted the accusations and asked the North Korean government to release them.

"It's very regrettable that the North is making such a groundless claim about them," the unification ministry said in a statement, adding, "we strongly call for their quick release and repatriation."

A ministry spokesperson confirmed in a press conference that Kim and Choe were South Korean citizens, but refused to clarify if they had links with the intelligence services.

He suggested instead that the two should be repatriated and an investigation conducted by the South Korean government.