North Korea indefinitely postponed reunions of families separated by the Korean War that had been set to start on Wednesday.
It was an apparent setback after weeks of improving relations following a spring that saw threats of war.
North Korea was vague about its decision today to call off the six days of reunions, which have not been held in three years, accusing unidentified conservatives in Seoul of a "reckless and vicious confrontation racket" against Pyongyang, a claim that it routinely makes.
It also vowed to "take strong and decisive counteractions against the South Korean puppet regime's ever-escalating war provocations".
Tensions on the Korean Peninsula had been gradually easing, with the North cooling its war rhetoric and seeking to restart various co-operation projects with South Korea.
The biggest highlight is the recent return of North and South Koreans to a jointly run factory park just across the border in North Korea after a five-month shutdown.
The North's Committee for the Peaceful Reunification of Korea said in a statement that the family reunions will be postponed until a "normal atmosphere" for dialogue returns.
It also said it would postpone any talks on resuming lucrative tours to a mountain resort in the North that were stopped in 2008 after a North Korean soldier shot and killed a South Korean tourist.
The reunions and the other improvements in the rivals' relations had been greeted with relief in Seoul. Many South Koreans have had little or no word about their loved ones for decades.
The 1950-53 Korean War separated millions of families, and huge numbers of refugees moved both north and south. Most do not even know whether their relatives are still alive because the two countries bar citizens from exchanging mail, phone calls and email.