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Last Updated: Friday, 1 June 2007, 09:06 GMT 10:06 UK
Korea talks break up without deal
Protester at an anti-Korean rally in Seoul on 29/05/07
Anti-North Korea protests have been held during the talks in Seoul
High-level talks between North and South Korea have broken up without agreement after a rift over Seoul's decision to delay rice aid shipments.

Both sides said they would continue to "study issues aimed at promoting peace on the Korean peninsula", but did not give dates for the next round of talks.

Seoul has linked resumption of food aid to progress from the North over its pledge to shut down a nuclear reactor.

But the North has not moved forward due to a dispute involving frozen assets.

Pyongyang has refused to honour its February promise to "shut down and seal" its Yongbyon reactor until it has access to its funds in a Macau bank.

Work has been ongoing since February to unblock the money - which the US had claimed was tied to money laundering and counterfeiting - but the North has still not withdrawn it.

Issues on hold

Although a South Korean official had earlier warned there would no joint declaration, the two sides did produce a four-sentence statement at the close of the talks.

They "have sufficiently presented their positions and held sincere discussions on fundamental and actual matters linked to progress in inter-Korean relations," the statement said.

Tensions had been expected as the latest round of bilateral talks got under way in Seoul on Tuesday.

South Korea insisted it had made clear to the North that its 400,000 tonnes of food aid - the first shipment of which was due in late May - was linked to its February pledge.

But Pyongyang is reported to have protested strongly that the two issues were unrelated - and accused "foreign powers" such as the United States of interfering with the rice deal.

The stand-off prevented progress on other inter-Korean issues such as the formal opening of cross-border railways and greater economic co-operation.

There was speculation that the North had threatened to suspend family reunions between North and South Koreans.

South Korea - which has been anxious to improve ties with its impoverished neighbour through aid and investment - appears to have taken an unusually tough stance, the BBC's Charles Scanlon in Seoul says.

But officials in Seoul remain confident that the deadlock will soon be broken, he adds.

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