Anti-Pyongyang leaflets cause flap

SEOUL - North Korea yesterday threatened to evict all South Korean staff from a joint industrial estate unless Seoul stopped civic groups spreading cross-border propaganda, the South's Defence Ministry said.

The threat came amid military talks held after months of frosty relations between Seoul and Pyongyang. They ended hours early and with little progress.

'The North's side said our people could not stay in Kaesong (an industrial complex) and Kumgang (a resort)...if the dropping of leaflets continues,' the ministry said in a statement on the outcome of the working-level meeting at the border village of Panmunjom.

But it got off to a rocky start, with discussions delayed by nearly an hour when the North Koreans demanded the entire meeting be open to the media while the South Koreans refused.

During the talks, the North's main demand was for Seoul to stop the spreading of propaganda leaflets that allegedly slander their leader Kim Jong Il, the South's Colonel Lee Sang Cheol told reporters.

The North warned of 'grave consequences', saying the passage of all South Koreans across the heavily fortified border could be restricted in addition to evictions from Kaesong and Kumgang. Seoul, in turn, urged Pyongyang to halt its defamation of President Lee Myung Bak, who has often been reviled by the North's state media as a 'traitor' and 'US sycophant'.

Leaflets dropped by planes or floated by balloons were an important propaganda tool during the Cold War era. The two sides agreed to end their propaganda battle at their first summit in 2000.

However, South Korean Christians and North Korean defectors have continued to float balloons with anti-Pyongyang messages.

More than 32,000 North Koreans, earning around US$60 (S$86) a month, work in 79 South Korean factories at Kaesong near the west coast. Kaesong and the Mount Kumgang resort on the east coast, both funded by Seoul to promote reconciliation, earn the impoverished North tens of millions of dollars a year.

Pyongyang suspended government-to-government contacts after Mr Lee took office with promises of a tougher North Korea policy. Ties soured further in July after North Korean soldiers shot dead a Seoul tourist who strayed into a restricted zone at Mount Kumgang.

Separately, a senior United States envoy extended talks in North Korea yesterday to save a deadlocked disarmament pact and convince Pyongyang not to restart a nuclear plant that makes arms-grade plutonium.

Assistant Secretary of State Christopher Hill went to Pyongyang on Wednesday and was set to hold a second day of talks with the North's top nuclear envoy.

The flurry of diplomacy coincided with a report that North Korea might be about to upgrade a launch site used to test missiles that could hit all of South Korea and most of Japan.