SOGWIPO, South Korea - South Korea has failed to persuade North Korea to agree to a plan to allow trains to cross their shared border for the first time in 55 years.
The two Koreas have finished four days of talks which followed Pyongyang's decision to call off the test runs of trains, due to take place on May 25.
In an exchange of harsh words, each side had blamed the other for scuttling the plan.
The South's Unification Ministry said in a statement after the talks between economic officials that some progress had been made on the rail links, but Seoul had not been able to persuade the North Koreans to go ahead with the trial runs.
"We expressed strong regret over the postponed test runs of rails because of the north's unilateral call, and urged them to start the test runs of rails and open rail links and roads as soon as possible," the ministry said.
The rail crossings would have been a deeply symbolic step in generally warming ties between the two Koreas. The last train ran across the border in 1951 during the Korean War, carrying wounded soldiers and refugees to the South.
Tracks extend across the border in two places. South Korea has provided the bulk of the capital to restore the rail links.
At the talks in the South Korean resort island of Cheju, the two sides reached a nine-point agreement that glossed over differences on the rail links and North Korea's refusal to return to stalled six-country talks on its nuclear weapons programmes.
They agreed that South Korea would provide US$80 million ($128.20 million) in raw materials for North Korean light industries such as clothing, shoes and soap from 2006 in return for securing rights to develop and sell the North's underground resources.
"South and North Korea will adopt an agreement to co-operate in developing light industries and underground resources, which will be taken effect upon conditions maturing," a joint statement said.
The two sides said they had also agreed on several rounds of inter-Korean cooperation talks in the near future.
South and North Korea remain technically at war because the 1953 truce that halted the conflict never gave way to a full peace treaty. Military tension remains high despite warming commercial and political ties in recent years.
The talks came just after South Korean President Roh Moo-hyun's ruling Uri Party suffered a stinging setback in local elections. Since the poll, Roh's support rating has plunged to a record low of about 20 per cent, a recent poll showed.
Roh had been criticised by the main opposition Grand National Party for providing too much unconditional aid to North Korea and not being able to win concessions from Pyongyang.
The last round of the six-country nuclear talks among the two Koreas, China, Japan, Russia and the United States was held in November. North Korea has refused to return, saying it will not be forced back to the table by US pressure.