The government said Monday that it is not willing to comply with preconditions North Korea has presented for talks.
The conditions include suspending joint military exercises by Seoul and Washington, and lifting the so-called May 24 economic sanctions.
Seoul imposed the sanctions after the North torpedoed a South Korean warship in 2010, killing 46 sailors.
"We have no intention to take actions on their preconditions first," said unification ministry spokesman Lim Byeong-cheol. "Such issues need to be discussed at inter-Korean talks."
Lim said if the government complied with such "improper" preconditions before dialog began, it would not help improve South-North relations fundamentally and sincerely.
On Dec. 29, the government proposed holding minister-level inter-Korean talks unconditionally in January about mutual concerns including the reunion of families separated during the 1950-53 Korean War.
Since then, the two Koreas have been caught in a war of nerves to grab better terms before they agreed to sit down.
Pyongyang continues to claim that the May 24 sanctions, which banned all trading and commercial activities between the two sides except at the Gaeseong Industrial Complex, are fundamental obstacles to the two Koreas' dialogue and cooperation.
"If South Korea is sincerely interested in holding the family reunion event, it should first make decisions, including lifting the sanctions and suspending the war practice to invade the North," said Pyongyang's state-run paper, the Rodong Sinmun, Monday.
"If the U.S. and the South's annual joint Key Resolve and Foal Eagle exercises are pushed ahead as planned, inter-Korean relations will plunge into catastrophe."
The joint military drills are slated for early March.
On Sunday, the communist state even warned of "stern punishment," accusing the South of failing to forge "even the basic mood."
Despite harsh rhetoric from the North, the ministry said the government still believes that the isolated state is open to holding talks, as its young leader Kim Jong-un mentioned during his New Year speech. Kim even indicated that an inter-Korean summit was possible.
Regarding the fact that the North has yet to respond to Seoul's offer for talks, Lim said, "There could be some reason behind their move. But the North should stop demanding improper preconditions and come to the dialog table if it has a sincere wish to improve the two Koreas' relations."
The spokesman added that the government will not be bound by the timing of the talks.
"We don't think the talks must be held in January simply because of Seoul's initial offer. The offer will still be valid as February approaches," he said.
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