North Korea has been holding South Korean national Joo Won-moon since April, after he admitted to illegally crossing the border in hopes of a "great event."
The restart of a reactor that produces weapons-grade plutonium was announced by the Korean Central News Agency, which also says North Korea is ready to use nuclear weapons "any time."
U.S. Ambassador Mark Lippert was at a performing arts center in Seoul preparing to give a speech on relations between the U.S. and the two Koreas when he was attacked.
Hours before the deadline set by North Korean for Seoul to halt propaganda broadcasts across the border, the two sides said they would meet face-to-face at the border village of Panmunjom.
Joint exercises between the U.S. and South Korea have raised tensions in the region. Thursday's exchange was the first time the North and South had traded fire in five years.
The reclusive authoritarian regime has announced that it will turn back its clocks half an hour beginning next week to mark 70 years since liberation from Japan.
The country warned in June it faces its worst drought in a century. That's raised concerns — and some doubts about the severity of the situation. In the 1990s, 1 million died in a famine.