Seoul and Pyongyang did not reach agreement on reopening a joint industrial site on Monday, dimming hopes of an early improvement in ties after months of tension on the Korean Peninsula.

The third round of talks about the complex, which followed two failed attempts this month, again ended without agreement, the Republic of Korea's Unification Ministry said.

But they agreed to hold the fourth talks on Wednesday, according to Xinhua News Agency.

The latest meeting was held at the suspended Kaesong industrial complex, which opened 10 kilometers north of the heavily fortified border in 2004 as a rare symbol of cooperation between the two neighbors.

The zone had long remained resilient to turbulence in ties but eventually became the most high-profile victim of the latest flare-up following Pyongyang's February nuclear test.

The Democratic People's Republic of Korea, citing perceived hostility by the ROK and its joint army exercises with the US, withdrew all its workers in April and banned entry by ROK staff, prompting Seoul to pull out its managers in early May.

At a rare meeting earlier this month, the two sides agreed in principle to reopen the site, where more than 53,000 DPRK citizens worked in 123 Seoul-owned factories producing textiles or light industrial goods.

But little progress has been made since amid disputes over which side will take responsibility for the suspension.

Seoul has asked Pyongyang to take responsibility for the damages to ROK companies caused by its unilateral shutdown of the industrial park in April.

Seoul also wants to allow foreign companies to operate in Kaesong in an apparent bid to make it more difficult for Pyongyang to shut the site if relations worsen.

"(We) should develop Kaesong into an international industrial complex by allowing ... business activities of foreign companies" as well as ROK enterprises, Seoul's chief delegate Kim Ki-woong said in opening remarks on Monday.

Kim replaced Suh Ho in what was described as a regular reshuffle ahead of the talks.

The DPRK has called for an unconditional and quick restart, blaming Seoul's "hostile policy" for the suspension and the current deadlock in negotiations.

The talks are a contrast to months of cross-border friction and threats of war by Pyongyang after its nuclear test attracted tougher UN sanctions.

Pyongyang on Wednesday proposed separate meetings to discuss the resumption of suspended cross-border tours to its scenic Mount Kumgang resort, and the reunion of families separated since the Korean War (1950-53).

But it retracted its proposal a day later after Seoul only accepted the offer of talks on family reunions while refusing to discuss the Mount Kumgang tours - once a valued source of hard currency for the DPRK.

On Saturday, the DPRK said the outcome of the Kaesong talks would affect overall relations.

"Unless the Kaesong industrial complex issue is resolved, there cannot be any progress in relations," it said in a statement on official media.

Facing millions of dollars in damages due to the shutdown, many Seoul businessmen with factories in the Kaesong industrial complex have threatened to leave the complex permanently if the current suspension continues.

AFP - Xinhua

(China Daily 07/16/2013 page10)