South Korea balks at joint North-South Zone

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Unification Minister Kim Ha-joong said Seoul would maintain the industrial zone but "it would be difficult to expand (the complex) unless North Korea's nuclear issue is resolved," according to his office.

Kim, who is responsible for Seoul's relations with North Korea, made the comments at a meeting with South Korean businessmen who run factories in the North, his office said.

The sprawling Kaesong industrial complex, located just north of the heavily fortified border, is a prominent symbol of reconciliation between the two Koreas, combining the South's technology and management expertise with the North's cheap labor.

The leaders of the two countries agreed to expand the complex during a summit last year.

But new South Korean President Lee Myung-bak has vowed to review rapprochement projects pushed by his two liberal predecessors, saying progress in the nuclear row is a prerequisite for further large investment and aid projects in North Korea.

Sixty-nine South Korean companies are currently operating in the industrial zone, employing some 23,220 North Korean laborers, according to the South's management committee.

Kim also said North Korea should work more sincerely to resolve the nuclear impasse, adding that the success of the joint industrial project depends on the North.

The United States and North Korea held talks last week in Switzerland to try to resolve a dispute over the North's pledge to fully account for its nuclear programs under an aid-for-disarmament deal reached last year. Washington says North Korea has failed to provide a full description of its nuclear activities, while North Korea says it gave the U.S. a list in November.

The two sides agreed to continue discussions on a solution to the impasse, the North's official Korean Central News Agency said Tuesday.