North Korea has blown up an inter-Korean liaison office building just north of the heavily armed border with South Korea in a dramatic display of anger that sharply raises tensions on the Korean peninsula and puts pressure on Washington and Seoul amid deadlocked nuclear diplomacy.

The demolition of the building, which is on North Korean territory and had no South Koreans working there, is largely symbolic, but it is probably the most provocative thing Pyongyang has done since it entered nuclear diplomacy in 2018 after a US-North Korean standoff had many fearing war.

It is a serious setback to the efforts of liberal South Korean President Moon Jae-in to restore inter-Korean engagement.

South Korea Koreas TensionsThe opening ceremony for the liaison office in Kaesong (Korea Pool/Yonhap/AP)

Pyongyang’s official Korean Central News Agency said the nation destroyed the office in a “terrific explosion” because its “enraged people” were determined to “force (the) human scum and those, who have sheltered the scum, to pay dearly for their crimes”, apparently referring to North Korean defectors who for years have floated anti-Pyongyang leaflets across the border.

The agency did not detail how the office in the North Korean border town of Kaesong was destroyed.

Photos from the South’s Yonhap News Agency showed smoke rising from what appeared to be a complex of buildings. The agency said the area was part of a now-closed inter-Korean industrial park where the liaison office was located.

The North also said it has cut off all government and military communication channels with the South while threatening to abandon bilateral peace agreements reached during North Korean leader Kim Jong Un’s three summits with Mr Moon in 2018.

Kim Jong UnKim Jong Un (Korean Central News Agency/Korea News Service/AP)

Some analysts believe the North, after failing to get what it wants in nuclear talks, will turn to provocation to win outside concessions because its economy is likely to have worsened because of persistent US-led sanctions and the coronavirus pandemic.

North Korea may also be frustrated because the sanctions prevent Seoul from breaking away from Washington to resume joint economic projects with Pyongyang.

The liaison office has been shut since late January because of coronavirus concerns. The site, reportedly built with South Korean money, was the first such office between the two Koreas since their 1945 division and was considered a symbol of Mr Moon’s engagement policy.

South Korean presidential national security adviser Chung Eui-yong, who shuttled between Pyongyang and Washington to help set up Mr Kim’s first summit with President Donald Trump in June 2018, convened an emergency meeting of the National Security Council to discuss the destruction of the liaison office.

North Korea had earlier threatened to demolish the office as it stepped up its rhetoric over Seoul’s failure to stop activists from flying propaganda leaflets across the border.

Kim Yo JongKim Yo Jong (Jorge Silva/AP)

On Saturday night, Kim Yo Jong, the influential sister of North Korea’s leader, warned that Seoul will soon witness “a tragic scene of the useless North-South liaison office (in North Korea) being completely collapsed”. She also said she would leave to North Korea’s military the right to take the next step of retaliation against South Korea.

The North has threatened to abandon a 2018 bilateral tension-reduction agreement, which observers say could allow it to trigger clashes along the land and sea borders.

On Monday, Mr Moon urged North Korea to stop raising animosities and return to talks, saying the two Koreas must not reverse the peace deals that he and Mr Kim reached during the 2018 summits.