SEOUL - NORTH Korea said on Monday it will suspend a joint tourism project and halt cross-border train service with South Korea starting next week over Seoul's hard-line stance on the communist nation.

The North's army also said it will 'selectively expel' South Koreans from a joint industrial zone in the city of Kaesong - but stopped short of shutting down the South Korean-run factories that are a key source of hard currency for the impoverished nation.

Monday's announcement laid out the first concrete measures the North plans to take in implementing its threat to restrict traffic to the South starting Dec 1, and marked a new escalation of tension between the two countries still technically at war.

'The South Korean puppets are still hell-bent on the treacherous and anti-reunification confrontational racket,' the North said in a message to the South, according to North Korea's state-run Korean Central News Agency.

Relations between the two Koreas have been tense since the conservative President Lee Myung Bak took office in Seoul in February with a pledge to change policy on the North.

He said he would be different from his liberal predecessors, and accused them of being too soft on their communist neighbor.

North Korea since has suspended reconciliation talks and threatened to cut any remaining ties with Seoul.

Despite the chill in government-level ties, civilian exchanges have continued, with South Korean-run factories continuing to operate in the industrial complex in Kaesong, and a South Korean firm operating tours to the city's historic downtown.

A third landmark inter-Korean project - tours to the North's scenic Diamond Mountain - were suspended after the shooting death of a South Korean tourist in July.

KCNA's report said some South Koreans still working at Diamond Mountain would also be expelled next month.

Monday's announcement means the North will shut down the Kaesong tours and enforce stricter border control for traffic connected to the Kaesong industrial park.

The North also said it will halt train service between the South and the Kaesong industrial complex - a symbolic rail line that was one of the first inter-Korean projects to emerge from a warming of relations under past South Korean administrations.

Kaesong is home to more than 80 South Korean factories that employ about 35,000 North Korean workers.

The two Koreas fought the bloody 1950-53 Korean War that ended in a truce, not a peace treaty, leaving the divided peninsula still technically at war. -- AP