South Korea proposes fresh talks with North over shuttered factories

SEOUL: South Korea offered to hold talks with North Korea aimed at reopening a jointly run factory park near the armed border between the two countries just three weeks after their last attempt at dialogue faltered amid bickering over protocol.

The offer, made on Thursday, was for talks to be held on Saturday at the Panmumjom truce village that straddles the border, the South's Unification Ministry said in a statement.

It was made through a telephone hotline that was restored by the North late on Wednesday and comes amid pressure from owners of small and medium businesses at the shared Kaesong industrial zone that are incurring loses.

"The proposal takes into account the big problems facing the firms of Kaesong industrial zone three months after it was suspended and the potential damage anticipated with the start of the monsoon season," ministry spokesman Kim Hyung-suk said.

A sudden flurry of activities in June raised expectations that the two Koreas, which remain technically at war under a truce ending the 1950-53 Korean War conflict, would resume high-level dialogue for the first time in six years to ease tension.

The North had proposed talks to reopen the money-spinning factory park, which generates $90 million annually in wages for its workers, after shutting it down in April after threatening the South with war and nuclear annihilation.

Proposed cabinet-level talks were called off one day before the meeting was to start, with each side accusing the other of insincerity by planning to send low-ranking officials.

The United States and South Korea, as well as China, the North's sole major diplomatic ally, have urged Pyongyang to take steps to end its nuclear programme and to return to dialogue.

The impoverished and isolated North conducted its third nuclear test and threatened Seoul and Washington with nuclear attacks earlier this year.

South Korean President Park Geun-hye has pledged to engage the North in dialogue and take steps to build confidence for better ties, but has also vowed not to give in to unreasonable demands or make concessions to achieve superficial progress.

Her predecessor, Lee Myung-bak, cut off a decade of lucrative aid from liberal leaders and demanded nuclear disarmament, angering the North.

The North was blamed for sinking a South Korean navy ship and bombing an island while Lee was leader.