Seoul - North Korea's military threatened Monday to quit an industrial cooperation project if South Korean activists do not stop dropping propaganda leaflets in its territory.

The North urged the South in a meeting between military officers from both countries to put a stop to the leaflet distribution, the South Korean Foreign Ministry said.

Pyongyang complained at the gathering at the inter-Korean border that the leaflet drops by South Korean organizations was increasing.

A ministry spokesman said the North threatened to close down a jointly operated business park in the North Korean border town Kaesong should the drops continue, repeating warnings voiced at talks three weeks ago.

Bilateral relations have taken a downward turn since the conservative government of President Lee Myung Bak came too power in South Korea in February. Lee has pursued a stricter course against Pyongyang than his liberal predecessors.

High-level North-South Korean talks have been mothballed by Pyongyang after Lee took office.