SEOUL: Cash-strapped North Korea has proposed talks with South Korea about resuming tourism projects which had earned it tens of millions of dollars a year until relations soured.

The North’s Asia Pacific Peace Committee, the state agency in charge of cross-border exchanges, suggested a meeting on January 26-27 in a message to South Korea’s unification ministry. “It is very regretable that tours of Mount Kumgang and the area of Kaesong in North Korea have been suspended for one-and-a-half years,” the communist state’s official news agency quoted the message as saying.

The unification ministry confirmed it had received the message. “It’s a positive move, and we will consider it positively,” an unidentified Seoul official told Yonhap news agency.

In a further apparent sign that Pyongyang wants to improve relations, the two countries have also agreed to hold separate talks next week on ways to revitalise their jointly run industrial estate in the North.

South Korea suspended the tours after the North’s army shot dead a Seoul housewife at the scenic Mount Kumgang resort

in July 2008. She had

strayed into a poorly marked closed military zone

while on a stroll.

Pyongyang began making peace overtures to Seoul last August, after months of

bitter hostility which began when a conservative South Korean government came to power in February 2008 and linked major aid to progress in denuclearisation.

Some analysts believe the North’s recent overtures to both South Korea and the United States were prompted by tougher sanctions imposed following its nuclear and missile tests last year.

In November last year, the North made a proposal through a visiting South Korean businesswoman to resume the tours. South Korea ignored the overture, saying it did not come through official channels. It says the two governments should hold talks to work out firm agreements on the safety of South Korean visitors before the trips can resume.

Mount Kumgang tours have earned some $487 million in fees for the North since they began in 1998. Cross-border visitors could also previously take day trips to the historic city of Kaesong just across the frontier. Kaesong is also the location of the joint industrial estate, where 40,000 North Koreans work in 110 South Korean factories. All the cross-border projects are run by South Korea’s Hyundai Asan company, which has lost millions of dollars since the tours were suspended.