South Korean troops have exchanged fire with a runaway soldier who was surrounded in a forest after he killed five comrades near his North Korea border outpost, and brought in his parents to persuade him to surrender, a defence official said.

One platoon leader was wounded when the sergeant, identified only by his surname Yim, threw a grenade and fired on the military personnel closing in on him, according to a defence ministry official. The official said troops fired back.

Villagers in a nearby area were warned not to leave their houses. The village head, Jang Seok-kwon, said that he heard gunshots ring out about 10 times on Sunday.

The military brought Sgt Yim's parents to the forest about six miles from the border outpost to try to persuade him to give up, the official said.

Sgt Yim opened fire on Saturday night with his standard issue K2 assault rifle at the outpost near the North Korean border in Gangwon province, east of Seoul, killing five fellow soldiers and wounding seven others, the military said.

Sgt Yim, who was scheduled to be discharged from the military in September, fled with his weapon, but it was not clear how much live ammunition he had.

A Defence Ministry official confirmed Sgt Yim was considered a "protected and watched-on soldier," which means he needed special attention among servicemen. According to the official, the South Korean military assigns such status based on servicemen's periodical personality test.

Sgt Yim was designated a grade A protected soldier in April last year - one with a high risk of suicide attempt or inducing other accidents who could not serve at heavily guarded outposts - then improved to grade B status last November. It means he was being watched with focused attention, but could serve at the outposts at the commander's discretion.

Thousands of troops from the rival Koreas are squared off along the world's most heavily armed border.