SEOUL - South Korea on Friday vowed no let-up in its fierce pressure on Pyongyang to formally accept responsibility for the shutdown of the Gaeseong industrial town and pledge not to close it again.
After the sixth round of normalization dialogue Thursday, Seoul declared a breakdown in talks and threatened to make a "grave decision" if the North continued to rebuff its demands.
Pyongyang warned that failure to reopen would lead it to deploy its military to the district.
Observers viewed Seoul's message as an indication that it was willing to consider a complete shutdown of the last remaining symbol of inter-Korean rapprochement.
"Safeguarding against a relapse and (establishing) a future-oriented normalization are the government's position and clear principles," a Cheong Wa Dae official told reporters Friday.
"That's probably common sense shared by all of our people."
The biggest sticking point is how to prevent another closure of the industrial zone.
Seoul insisted the communist state alone provide "institutional assurances" while Pyongyang argued that the two sides jointly make such a commitment.
The Unification Ministry defended its demands as indispensable to the future of the joint complex in which South Korean companies heavily invested.
Its spokesman Kim Hyung-suk said Seoul's wording in the draft agreement with the North contained "nothing unreasonable or unconvincing for the people."
"If the North does not show a sincere attitude toward the measures to prevent a recurrence of (the district's suspension), we will have no choice but to make a grave decision," he said repeating his statement the day before.
Kim refused to elaborate but indicated the possibility of closing the park by saying that his expression was "clear enough to disallow various interpretations."
After the ministry mentioned a "grave decision" last time in April, it pulled out all the remaining South Koreans from the complex after the North imposed an entry ban and withdrew its own workers.
"I would reiterate that we hope North Korea will consider the (assurances) issue very seriously and change course," Kim added.
Pyongyang, for its part, criticised Seoul's lack of flexibility and adherence to its initial demands.
The North's side appears to have made concessions by agreeing to globalise the factory park, protect South Koreans' safety and assets, and ensure easy passage, communications and customs.
"If the Gaeseong industrial district cooperation project with the South collapses, our military will reoccupy the area," the North's lead negotiator Park Chol-su told South Korean reporters late Thursday, saying the talks were heading toward breakdown.
With the prospect for another meeting looking gloomy, concerns are rising over the fate of the inter-Korean business project.
A raft of upcoming political and military events could provide sources of tension, such as commemorations of the 60th anniversary of the 1950-53 Korean War and the armistice this week, which will be held separately by the two Koreas.
Seoul and Washington are also slated to stage their annual weeklong joint military drills called Ulji Freedom Guardian next month, which Pyongyang has called "provocative" and "war games for aggression."
A shutdown of the complex would deal a blow to President Park Geun-hye, who has trumpeted her trust-building process as the answer to better cross-border ties but has taken flak for her rigidity and alleged obstinacy.
But if the two Koreas manage to refrain from upping tension for the time being, renewed momentum for dialogue could come earlier than expected, some observers say.
After the Thursday meeting, Kim Ki-woong, the South's chief negotiator and director-general of inter-Korean cooperation district support at the Unification Ministry, noted that his North Korean counterpart said the talks were "on the verge of" collapse rather than "collapsed."
A communication line based at the border truce village of Panmunjeom also remains intact, the ministry said.
Han Jae-kwon, head of the Gaeseong Industrial Complex Companies Association, and 11 other people running plants in the border city visited the Unification Ministry Friday in protest against the teetering negotiations. They met with Vice Minister Kim Nam-shik and Kim Ki-woong.
"They were frustrated with the future outlook, so was the vice minister. After all, (the talks) are up to the North side's attitude. We told them we will make efforts to support them promptly in possible areas," a ministry official told reporters on condition of anonymity due to the sensitivity of the matter.