SEOUL – North Korea demanded Sunday that South Korea drop all "military provocations" if it wants to revive a jointly-run business estate which has suspended operations amid high military tensions on the peninsula.

The Kaesong Industrial Complex, opened just north of the tense border in 2004 as a rare symbol of cooperation, has fallen victim to the escalating stand-off.

Pyongyang, accusing Seoul of sparking the military tension, banned entry to the estate by South Koreans and pulled out all its 53,000 workers early last month, rejecting repeated calls by the South for talks.

Seoul last week withdrew all its nationals from Kaesong. A final group of seven returned Friday night after the South had sent cars loaded with $13 million in cash to the estate to cover unpaid wages and taxes.

The North's National Defence Commission, its most powerful body, on Sunday again blamed the South for the suspension.

If the South was truly worried about Kaesong's future, it "should take measures of stopping all the hostile acts and military provocations, the source of the prevailing situation", said a spokesman for the commission, which is chaired by leader Kim Jong-Un.

The spokesman's statement, on the Korean-language service of the official KCNA news agency, cited anti-Pyongyang leaflets sent across the border in balloons by conservative activists and defectors.

It also cited the South's preparations for an annual military exercise with its US ally scheduled for August.

"These are parts of confrontational actions and war practice taken by the enemy government when it is rambling that it wants to normalise the Kaesong complex," the spokesman said.

Scrapping hostile acts and provocations would be a "way for re-opening the traffic, re-linking the communication line and putting (Kaesong) on a normal operation", the spokesman said.

The statement on the English-language version of KCNA did not specifically mention the leaflet launches or the planned exercise.

Previously Kaesong – where 53,000 North Koreans worked at factories for some 120 South Korean firms – had remained largely immune to strains in relations.

While neither side has gone so far as to declare a permanent shutdown, experts say the next step could be for the South to cut electricity to the estate.

The cross-border leaflets typically contain messages criticising the Kim dynasty that has ruled the North with an iron fist for more than six decades.

Amid high tensions across the border, South Korean police on Saturday stopped a planned launch of such leaflets, sparking an angry protest from activists.

The North's statement on Korean-language KCNA described the police action as "at least a bit fortunate" but said "malicious" groups plan further launches.

Tension has been high since the impoverished but nuclear-armed North issued blistering threats of missile and nuclear attacks on the South and the United States.

The threats followed tougher UN sanctions for its third nuclear test in February, and US-South Korean joint military drills.