Two Koreas fail to reach agreement on Kaesong

North and South Korea failed today to reach agreement on reopening a jointly-run industrial estate, dimming hopes of an early improvement in ties after months of friction.

A third round of talks about the complex, which followed two failed attempts this month, again ended without agreement, the South's unification ministry said.

But the two sides will meet again, a ministry official said, adding the date would be disclosed later.

The latest meeting was held at the suspended Kaesong industrial complex, which opened in 2004, 10 kilometres (six miles) north of the heavily-fortified border as a rare symbol of cooperation.

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 North, citing perceived hostility by the South and its joint army exercises with the US, in April withdrew all its workers and banned entry by southerners, 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 estate, where 53,000 North Koreans worked in 123 Seoul-owned factories producing textiles or light industrial goods.

But little progress has been made since then amid squabbles over which side will take responsibility for the suspension, and Pyongyang's refusal to accept Seoul's demand for firm safeguards against another unilateral shutdown.

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

"(We) should develop Kaesong into an international industrial complex by allowing... Business activities of foreign companies as well as South Korean firms," Seoul's chief delegate Kim Ki-Woong said in opening remarks.

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

"The South came up with the ludicrous idea of 'internationalising' Kaesong. It is not even worth discussing because lack of foreign firms... Is not the reason behind the current crisis," its official website, Uriminzokkiri, said in an editorial today.

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