THE two Koreas have held fresh talks on reopening a joint industrial estate, ahead of South Korea-US military exercises next week that the North says are a rehearsal for war.
The two sides have already met for six rounds of fruitless discussions on the future of the estate in Kaesong, which was effectively shut down by North Korea in April as military tensions soared on the divided peninsula.
With South Korea starting an annual military drill with the United States on Monday, the result of the latest negotiations could determine whether the peninsula is sucked into another dangerous cycle of escalating hostilities.
"The fact we are sitting here for the seventh round shows that the issue is not an easy one to solve," the South's chief delegate Kim Ki-woong told his North Korean counterpart Pak Chol-su on Wednesday as the talks began in Kaesong, 10km inside the North Korean border.
Pak likened the negotiations to farming and said the recent break in an extended heatwave on the peninsula boded well.
"With the weather so good, I think we can tend the field well and can possibly reap good produce," Pak said, according to a pool report.
An association representing the owners of the 123 South Korean companies in Kaesong said on Tuesday that the time had come to make a lasting deal on resuming operations.
"This time, our government and the North's authorities must reach agreement on reopening Kaesong without fail," it said in a statement.
The North had proposed the seventh round of talks last week, just hours after Seoul announced it was going to start compensation payments totalling $US250 million ($A276.01 million) to businesses affected by Kaesong's closure.
The payout move was widely seen as the first step towards a permanent withdrawal from the zone.
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