Officials in Japan say they have found the bodies of three men in dark green uniforms, off the northern coast near Takahama, north of Osaka.

The officials say they believe the men may be North Korean troops, from a ship sunk by the South Koreans last week.

The South Koreans said it was a spy ship, infiltrating agents into their territory.

The encounter took place close to the Korean coast -- some seven-hundred kilometres away from where the Japanese found the three bodies.