SEOUL, SOUTH KOREA (TIP): North Korea on January 9 dismissed a South Korean proposal to resume reunions of families separated by war, but used an unusually mild tone that indicated it still wants better ties with its rival to help boost its struggling economy. The reunion program has been stalled amid tension between the rival Koreas since late 2010. The Koreas had agreed to resume the humanitarian program last September but North Korea abruptly canceled the plan.

North Korea wants to link the reunions to a restart of a lucrative joint tourism project at its scenic Diamond Mountain, according to Seoul officials. But South Korea wants to deal separately with the tourism project, which provided a legitimate source of hard currency for the impoverished North before it was suspended when North Korean soldiers fatally shot a South Korean tourist there in 2008. South Korea offered this week to hold talks on Friday on resuming the reunions around the Lunar New Year holiday later this month, saying it could help improve strained ties.

The Lunar New Year is celebrated by both Koreas and is traditionally a time when relatives get together. North Korea responded Thursday that the talks could take place “at a good season” if the South is willing to discuss “the proposals of our side,” an apparent reference to the tourism project. The North’s Committee for the Peaceful Reunification of Korea also said the reunions could not occur this month because of annual springtime military drills planned by South Korea and the United States, saying the separated families could not have “reunions in peace amid gunfire,” according to the North’s official Korean Central News Agency.

However, North Korea’s statement did not include its typical harsh rhetoric against Seoul, and proposed that the countries could meet later if conditions are met. Analysts said this suggests that North Korea doesn’t want to completely cut off ties with South Korea because it needs outside investment and assistance to achieve leader Kim Jong Un’s vow of developing the economy and improving living standards. “It’s like rejecting the South Korean offer in a very euphemistic manner,” said Lim Eul Chul, a North Korea expert at South Korea’s Kyungnam University.

“Cutting off ties with South Korea would be burdensome for North Korea.” North Korea urgently wants to restart the tourism project because “South Korean investment would set the tone for drawing other foreign investment,” said Chang Yong Seok of the Institute for Peace and Unification Studies at Seoul National University. South Korea expressed its regret over the North Korean decision. “The North must show its sincerity by actions rather than talking about improvement in South-North Korean relations only with words,” the unification ministry said in a statement.

Last week, North Korean leader Kim called for better ties with South Korea in his annual New Year’s Day message, but also warned of possible nuclear war. Millions of families have been separated since the 1950-53 Korean War, which left the two Koreas divided by a tightly militarized border. The reunions are highly emotional because most participants are in their 70s or older and are eager to see their relatives before they die.

Tensions rose sharply last spring when North Korea issued a series of threats of nuclear strikes against Seoul and Washington. Prospects for inter- Korean ties became uncertain last month after North Korea’s execution of Kim’s uncle, Jang Song Thaek, on treason charges, with South Korean officials saying the North might launch provocations against the South to boost internal unity.