The working-level four-hour meeting at the border truce village of Panmunjom failed even to set the date for a next session, a ministry spokesman said.

South Korean officials had said the meeting would discuss ways to ease travel, customs clearance and communications at the Seoul-funded Kaesong industrial estate just north of the closely guarded border.

A regular cross-border freight train service to Kaesong started in early December for the first time since the 1950-53 Korean War.

At a rare summit last October leaders of the two nations agreed in principle on sweeping joint economic projects. But there has been little practical progress since then.

High-level military talks ended last month without agreement on a proposed joint fishing area to avert clashes in the Yellow Sea, due to disputes over where the sea border should run.

Seoul's unification ministry said separately that working-level talks on broader railway cooperation will be held next Tuesday and Wednesday at Kaesong.

The two-day meeting was originally scheduled to start on Tuesday this week, but the North proposed a delay on the grounds it needed more time to prepare.

The postponement sparked speculation that Pyongyang wants to delay dialogue until it assesses the incoming conservative government of president-elect Lee Myung Bak.

Mr Lee, who takes office on February 25, has promised a firmer stance with the North and has said he will review the summit projects.

At next week's talks, officials are scheduled to discuss a summit project for the South to repair the dilapidated railway up to North Korea's border with China.

The two leaders had agreed to send a train of supporters to the Beijing Olympics this year. -- AFP