Yonhap news agency, quoting military sources, said the North on Sunday announced five more shipping exclusion zones effective from 7 am on that day to 8 pm (1100 GMT) on Tuesday, February 2.

Last week the communist state banned shipping for two months from two zones along its disputed west coast sea border with South Korea.

The following day it started a three-day artillery exercise in which 370 shells landed near the borderline, raising tensions on the peninsula.

Yonhap said the additional zones include western waters off Kyodong island and off Chulsan and Sunchon counties in North Pyongan province, and eastern waters off Kumya county in South Hamkyong province.

Military officials said they were checking the agency's report.

The North has tested short-range missiles off Chulsan, Sunchon and Kumya in the past.

Pyongyang said its artillery drill last week was part of a regular winter exercise but South Korea and the United States criticised it as provocative. North and South Korea have remained technically at war since their 1950-1953 conflict.

Despite the rise in military tensions, the two nations went ahead with talks Monday on upgrading their joint industrial estate at Kaesong just north of the heavily fortified land border.

The North -- which has long been bitterly hostile to Seoul's conservative government -- appears to be changing its attitude, according to a Seoul presidential spokesman.

"It is now trying to open dialogue with South Korea and the United States. I believe it feels the need for dialogue," said spokesman Park Sun-Kyoo.

Park refused to confirm a report in Chosun Ilbo newspaper that the two sides held secret talks last November about a possible summit but failed to agree on the agenda.

But he told AFP there was no reason not to hold one if the North met Seoul's demands: that any summit should make practical progress in relations and that the nuclear issue must be discussed.

"We do not want meaningless talks like before," Park said in reference to leaders' meetings in 2000 and 2007.

President Lee Myung-Bak revived summit speculation last week when he expressed willingness to meet North Korean leader Kim Jong-Il, possibly even this year.

"However, if we meet, we have to engage in fruitful dialogue and hold enough discussions on the North Korean nuclear issue," Lee said in a BBC interview.

The Kaesong estate raises millions of dollars a year for the sanctions-hit communist state but is the last reconciliation project still operating.

Relations worsened after Lee took office in February 2008 and linked major aid to progress in the North's nuclear disarmament.

The North began making peace overtures last summer in what some analysts said was an attempt to ease sanctions imposed for its missile launches and nuclear tests.

Pyongyang has expressed willingness in principle to return to six-nation nuclear disarmament talks. But first it wants sanctions lifted and US agreement to hold talks about a permanent peace pact for the peninsula.

The North wanted Monday's talks at Kaesong to focus on a wage rise for its 42,000 citizens who work at 110 South Korea-funded plants. It terms the current pay of 75 dollars a month including welfare payments as "very paltry."

The South says talks should first focus on easier cross-border access to Kaesong and on housing for northern workers there.

No agreement was reached in the morning session, Seoul's unification ministry said. Talks were apparently continuing into the evening.

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