Tensions between North and South Korea escalated further on Friday, as the North confiscated five South Korean-owned hotels in a jointly operated mountain resort area. Pyongyang officials also warned that the two nations are on the brink of war after a South Korean ship mysteriously sank last month.

The seizure of the hotels represents a highly symbolic statement against pursuing peace, as the hotels were located in North Korea's Mount Kumgang. The resort area had been established so families separated by the 1950-53 war could visit one another. China’s Xinhua news agency called the tours a “longstanding but fragile symbol of peace on the Korean Peninsula.”

Officials in the communist nation accused South Korean President Lee Myung-bak of seeking out “confrontation” with it and added that cross border tours would be permanently stopped.

South Korea had suspended activity at the resort after a tourist was allegedly shot by North Korean soldiers in 2008, reports The New York Times. North Korean officials said their government was now taking control of the resorts as compensation for the resultant loss of revenues.

“This only shows that North Korea is not an entity with which one can do normal commercial deals and business,” said the South Korean government in a statement quoted in The New York Times. “We make it clear that the North Korea should be held responsible for worsening South-North Korean relations.”

It seems unlikely that tours will resume anytime soon without high-level diplomatic talks, reports The Korea Times. North Korean officials said they would expel any South Koreans who are working in the facilities, but they remain undecided whether the government will take control of the facilities or if they will be given to private tourism agencies to operate.

The decision to confiscate the resort properties is heavily linked to recent tensions between the two nations. The South has accused North Korea of involvement in sinking the Cheonan on March 26 near their maritime boundary, with the South's defense minister suggesting that a torpedo likely sunk the naval warship. The North has denied any involvement in the incident that killed 39 South Korean sailors.

This week, President Lee criticized the North's annual April 15 fireworks display to mark birthday of the late Kim Il-sung. According to the Associated Press, North Korea allegedly spent $5.4 million on fireworks on birthday celebration for the current leader's father. Given the food shortages in the North, Mr. Lee said the money would have been better spent trying to provide food for the nation’s citizens.

Tit-for-tat, the North then called Lee a “traitor” for criticizing the elaborate firework display.

In addition to tensions over the sunken warship and Lee's remarks, relations were further strained April 21 when the South apprehended two North Korean agents who had reportedly entered the country to assassinate Hwang Jang-yop, a prominent North Korean who defected to the South 13 years ago.

“The situation has reached such extreme phase that it is at the crossroads of a war or peace, much less thinking of the resumption of the tour,” said a North Korean state agency in a report by Agence France-Presse.

However, in his clearest remarks yet that the South will not unilaterally resume its war with the North, President Lee on Friday said "we'll try to cooperate with the international community in taking necessary measures when the results are out," according to Yonhap news agency.

Related stories: