(CNN) -- Hundreds of South Koreas were left in limbo after North Korea shut its borders Monday at the start of joint military exercises between the United States and South Korea.
U.S. troops have started joint military exercises with their South Korean counterparts.
When Pyongyang took the action, 573 South Koreans were staying at the Kaesong industrial complex, north of the demilitarized zone, South Korea's Yonhap news agency reported.
Many of the stranded South Koreans work at the complex, which is a joint project between the Koreas.
"The South Korean government is closely monitoring the situation and preparing for all contingencies," said Kim Ho-nyun, a South Korean Unification Ministry spokesman. "We emphasize that currently the first priority is the safety of our citizens."
Eighty South Koreans had applied to cross the border into South Korea on Monday, Kim said, but had not been cleared to do so.
"We are also not certain what will happen to the South Koreans that want to cross tomorrow as well," he said.
The cross-border developments came as North Korea said it would retaliate if a "satellite" launch from its northeastern coast were intercepted, with the communist nation saying interference would "mean a war."
"Shooting our satellite for peaceful purposes will precisely mean a war," a spokesman for the North Korean army said in a statement carried by the state-run Korean Central News Agency (KCNA).
U.S. and South Korean officials have said that North Korea appears to be preparing to test-fire its long-range missile, the Taepodong-2, under the guise of launching a satellite into space. The missile is thought to have an intended range of about 6,700 kilometers (4,200 miles), which -- if true -- could give it the capability of striking Alaska or Hawaii.
North Korea's bellicose announcement came on the first day of annual joint military drills between South Korea and the United States.
"We have said several times that the U.S.-South Korean military exercises are annual defensive exercises," Kim said.
"We again urge North Korea to maintain the agreed stance of mutual respect and to stop its verbal attacks and actions that are raising tensions on the Korean peninsula," he said.
The North said it has shut its borders to "any enemies" and has cut off "the North-South military communications in order to guarantee the security."
North Korea said the military phone lines with the South, the last remaining communications channel, will remain closed until the 12-day military exercises end on March 20, according to Yonhap.
Kim said his government is urging North Korea "to immediately retract this measure and to allow the smooth flow of personnel and communication."
On Saturday, U.S. envoy Stephen Bosworth said he wants dialogue with North Korea, but he also spoke against North Korea's move to go forward with a launch, saying it would be "ill-advised."