Monday, June 22, 1998 Published at 14:30 GMT 15:30 UK
Sub incident harms Korean relations
The sub sank while under South Korean navy escort
South Korea has accused the North of violating the 45-year-old armistice between them after capturing a mini-submarine in its territorial waters.
The submarine sank as it was towed into port by the South Korean navy.
It had been discovered entangled in fishing nets just inside South Korean waters, near the port of Sokcho. North Korean says the vessel was wrecked while on a training exercise.
These were the highest-level talks at the demilitarised zone for seven years - when they were announced earlier this month, American officials described the forthcoming meeting as a "breakthrough".
Its aim was to settle incidents and disputes along the heavily-fortified border area separating the two Koreas.
No peace treaty
The BBC Seoul correspondent says the incident has soured relations between North and South just when things had seemed to be getting better.
He says it is difficult to tell whether this submarine was deliberately violating South Korean waters or whether it was an accident.
Either way, he adds, the timing was unfortunate - relations had been improving between the two Koreas.
The South Korean military say it was a Yugo-class submarine - a small vessel designed for reconnaissance missions, but possibly used to infiltrate people into the South.
The North Koreans are thought to have 45 vessels of this type, each of which carries a crew of five or six.
Twenty-six North Korean commandos were accused of attempting to infiltrate South Korea. Most of them were killed by the South Korean army.