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(LEAD) Koreas to meet this week to discuss fate of South Korean assets

All Headlines 18:13 July 11, 2011

(ATTN: RECASTS throughout with planned meeting between two Koreas; CHANGES headline)

SEOUL, July 11 (Yonhap) -- South and North Korea agreed to meet this week to discuss the fate of seized South Korean assets at a scenic mountain resort for stalled joint tours in the isolated North, an official said Monday.

The move came days after Seoul called for a meeting with Pyongyang to try to defuse a potential dispute that could further worsen the already frayed ties between the two countries.

Earlier in the day, the North offered to hold the meeting at Mount Kumgang on Wednesday, South Korean Unification Ministry spokesman Chun Hae-sung said.

South Korea quickly informed the North that it will send a team of five government officials and five business representatives to the North's resort, Chun said.

South Korea "plans to ascertain North Korea's positions," Chun said as he renewed Seoul's commitment to protect its property rights.

The South Korean government and businesses have invested tens of millions of dollars into hotels, restaurants and a golf course at the resort since 1998 when the North opened Mount Kumgang on its east coast.

Last month, a delegation of South Korean government officials and investors traveled to the North's resort, though no substantial meetings took place.

The North has since issued an ultimatum that it will take unspecified legal steps to dispose of the assets unless South Korean investors come to the resort by July 13 with plans on how to handle their assets.

The agreement to hold the second meeting in as many weeks comes as the two Koreas marked the third anniversary of the shooting death of a South Korean female tourist near the resort.

The incident prompted Seoul to quickly suspend the joint program, depriving the North of a key source of much-needed hard currency.

The North has since ratcheted up pressure on South Korea in an apparent move to restart the tour program.

Pyongyang claims it has done everything it can to shed light on the shooting and guarantee the safety of future tourists. Still, Seoul says it has yet to receive a formal apology for the incident or guarantees to enhance safety.

In a move apparently triggered by anger, North Korea last year seized or froze several South Korean assets at the resort. Earlier this year, the North announced a law designed to develop the resort as a special zone for international tours.

Inter-Korean relations have plunged to their lowest level in decades following the North's two deadly attacks on the South last year.


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