The sergeant, identified only by his surname, Yim, opened fire last night with his standard issue K2 assault rifle at an outpost in Gangwon province, east of Seoul, according to a Defence Ministry spokesman. He spoke on condition of anonymity because of department rules.
Yim, who was scheduled to be discharged from the military in September, fled with his weapon, but it wasn't clear how much live ammunition he had, the official said.
Park Cheol-yong, the head of Madal village, near the army division where the gunfire took place, said he warned villagers to stay in their houses.
Park Jin-soo, a pastor at a church in the village, said that today services would take place as usual despite the tension over the missing soldier and the shooting.
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Thousands of troops from the rival Koreas are squared off along the world's most heavily armed border.
The Koreas have also traded fire along their disputed maritime border in the Yellow Sea. South Korea has repeatedly vowed to respond with strength if provoked by the North. Shootings happen occasionally at the border.
In 2011, a 19-year-old marine corporal went on a shooting rampage at a Gwanghwa Island base, just south of the maritime border with North Korea. Military investigators later said that corporal was angry about being shunned and slighted and showed signs of mental illness before the shooting.
All able-bodied South Korean men must serve about two years in the military under a conscription system aimed at countering aggression from North Korea.
The Korean Peninsula is still technically in a state of war as the 1950-53 Korean War ended with an armistice, not a peace treaty. About 28,500 US soldiers are stationed in South Korea as a deterrent against North Korean aggression.