SEOUL (REUTERS) - North Korea blamed the South on Thursday for scuttling fresh dialogue that aimed to ease tensions between the rival Koreas, saying Seoul deliberately torpedoed reconciliation talks planned for this week.

The latest outburst indicates Pyongyang may seek a return to confrontation rather than dialogue, some observers said.

Earlier this year, North Korea threatened nuclear and missile strikes against South Korea and the United States after it was hit with UN sanctions for its February nuclear weapons test.

This week's aborted talks had been intended to reopen a closed joint industrial zone with the South in what would have been a confidence-building measure between two countries that remain officially at war.

The talks were cancelled when the two Koreas disagreed over the rank of the officials to head the delegations that were to meet in Seoul.

"The problem... is not a simple issue related to the level of the head of the delegation to the talks but a manifestation of its sinister intention to make the talks between authorities abortive," the North's Committee for the Peaceful Reunification of Korea said in a statement carried by the KCNA news agency.

Seoul had wanted senior ruling Workers' Party official Kim Yang Gon, a close advisor to North Korean leader Kim Jong Un, to attend the meeting. Pyongyang said that was unheard of in protocol terms as the official was too senior to meet with Seoul's Unification Minister who was heading the South's delegation.

Capitalist and democratic South Korea, one of the world's richest countries, and the impoverished North, now led by the third generation of a "socialist" ruling family, both claim to be the sole legitimate rulers of the entire Korean peninsula.

Korea was divided after the Second World War and the 1950-53 Korean War ended in an armistice rather than a permanent peace treaty, leaving the two countries technically at war.

"The war of nerves means it does not look like there will be an easy breakthrough that will lead to dialogue any time soon," said Yang Moo Jin of the University of North Korean Studies in Seoul.

Singling out a specific person to be the North's chief delegate may have touched a nerve in the status-conscious North, Yang said.

North Korea appeared to have hunkered down on Wednesday after the talks collapsed. It stopped answering a phone line it re-established on Friday that had been severed in April.

Experts say the North often alternates from threats of military action to negotiations in a bid to extract aid. Its long term aim is to win diplomatic recognition from the United States and to be recognised as a nuclear weapons state.

The puny size of its economy, and its limited diplomatic clout means the North has few options to achieve recognition other than being viewed as a threat to regional security through its nuclear weapons and long range missile programmes.

Jang Jin Sung, a former North Korean official who defected and now runs a website called New Focus International, described his old job at this time of the year as "farming" South Korea for aid after a period of heightened tension.

"Traditionally, North Korea begins by creating a tense atmosphere and presenting a hard line," he wrote. It then follows up with demands for aid, he said.

This week's talks had been aimed at reopening an industrial zone the North closed earlier this year amid the threats of war.

The Kaesong zone generated around US$90 million (S$113 million) a year in wages for the more than 50,000 North Koreans who worked there.

North Korea's one major diplomatic ally, China, has urged Pyongyang to abandon its nuclear weapons programme and return to talks.