SEOUL—North Korea refused to allow South Koreans to travel to a jointly run industrial park inside the North, the latest form of pressure from Pyongyang as relations between the two nations remain tense.

South Korean drivers return to their trucks after being blocked at the border. Associated Press


North Korea usually allows South Korean factory managers and delivery staff to travel to the park early each morning, and others to return to the South after spending the night in the complex.

The South's Unification Ministry said the North notified it on Wednesday morning of its intention to ban staff traveling to the Kaesong Industrial Complex, which sits about 6 miles north of the border. Over 170 South Koreans were refused entry to the North on Wednesday. The North again blocked entry on Thursday morning, the ministry said.

A ministry spokesman said the North cited the reason as the current "situation" on the Korean peninsula.

Pyongyang made no comment about the move through its state media.

South Koreans have been able to leave the complex. A total of 33 traveled back on Wednesday and over 200 planned to return on Thursday. Over 800 stayed overnight in the complex on Wednesday as tenant companies made adjustments to ensure operations at the plant weren't affected by the ban on incoming staff.

On Thursday, North Korea repeated a threat it made on Saturday that it might close the industrial park because it had taken offense at comments from media in the South that it needed to keep the park open to provide much-needed funds for the regime in Pyongyang.

North Korea recently cut off a military telephone line used to coordinate traffic flowing into and out of the complex, but instead has used a separate phone line in recent days to allow goods and people to travel as usual. It wasn't clear whether the entry ban would extend beyond Wednesday. Each morning, South Korea makes a request to the North to allow in workers to travel to the park.

The industrial zone opened in late 2004 and was a product of the first-ever inter-Korean summit meeting in 2000 between South Korean President Kim Dae-jung and North Korean dictator Kim Jong Il. More than 120 South Korean companies employ about 53,000 North Koreans to make basic products such as shoes and bags.

It is also a lucrative operation for the North: About $90 million in annual wages are paid directly to the North's government., and some of the companies based at the industrial park are among the biggest employers in Kaesong, North Korea's third-largest city.

Pyongyang's Nuclear Program

Milestones in North Korean nuclear-weapons development.

During previous periods of inter-Korean tension, North Korea has threatened to close the project. South Korean workers were blocked from traveling to the complex for three days in 2009 as the North reacted angrily to annual military drills in the South, as it is doing again this year.

But operations at the park have continued even as all other cooperation has been suspended after provocations by North Korea against the South, including two attacks in 2010 that killed 50 South Koreans.

One South Korean factory manager who regularly travels to the complex said that his operations were running as normal on Wednesday but the entry ban meant he was unable to deliver raw materials or bring out sportswear worth about 200 million won ($178,600).

The South Korean government provides insurance for most companies operating in the Kaesong complex, but any major disruptions to operations would hurt other small South Korean businesses in the supply chain. A shutdown of the complex could have a broader impact on the South Korean economy as a signal of heightened risk of armed confrontation between the two Koreas.

"The Kaesong complex is always like a yardstick for some foreign investors when it comes to the geopolitical risk for their business on the Korean peninsula," said Cho Bong-Hyun, a senior research fellow at the IBK Economic Research Institute in Seoul.

No Entry

The gateways to Kaesong, closed and desolate Thursday AP

While South Koreans were able to travel out of the complex and back into South Korea on Wednesday, the project presents a potential risk of hostage taking by the North if relations deteriorate sharply. A senior government official in Seoul said Tuesday that preparations have been made to deal with that scenario, but added it is considered highly unlikely.

"Of course we have [a contingency plan for any hostage taking at Kaesong]. We hope these things don't happen. We are getting benefits but North Korea is getting more," said the official, who spoke on condition of not being identified.

South Korea's defense minister said Wednesday that military action would be an option if needed to ensure the safety of South Koreans at the park.

Relations between the two Koreas remain tense after the North said on Tuesday it would restart its only nuclear reactor to provide more plutonium for nuclear weapons. Pyongyang also has threatened attacks on the South, Japan and U.S. bases as it reacts to sanctions imposed on it for its Feb. 12 nuclear test and military drills in the South that continue to the end of this month.

—Min Sun Lee and Kwanwoo Jun contributed to this article.

Write to Alastair Gale at