Seoul - North and South Korea on Friday held another round of talks on the future of the last remaining joint business project, as political tension on the Koran Peninsula is on the rise.

In a first session Friday morning, talks centred on North Korean demands for hikes in wages and rents worth several hundred million dollars to keep up operations at the Kaesong industrial park located on the North Korean side of the border.

It remained unclear whether talks were to continue later in the day, the Unification Ministry in Seoul said.

North Korea reiterated its demands to a substantial rise in wages and rents, the official Yonhap news agency quoted a ministry official as saying.

Seoul again demanded the release of a South Korean national who has been detained by the North since late March on charges of criticizing the country's communist system.

The North's latest demands put the park's future in question, following Pyongyang's decision to unilaterally nix all existing contracts regarding the Kaesong complex.

Tension in the region has been increasing since North Korea conducted a nuclear test on May 25, its second since October 2006. (dpa)