(Bloomberg) -- North Korea withdrew from an office it set up about six months ago with South Korea that allowed the rivals to communicate around the clock, dealing a blow to President Moon Jae-in’s policy of rapprochement.

The two Koreas agreed to open the office during a historic April summit between Moon and North Korean leader Kim Jong Un to ease tensions between the two countries still technically at war. The decision to withdraw comes weeks after a nuclear summit between Kim and President Donald Trump broke down over sanctions squeezing North Korea’s struggling economy.

North Korea told South Korea Friday it will stop participating in the joint liaison office in the North Korean border city of Gaeseong, South Korea’s Unification Ministry said. North Korea said it is ”pulling out with instructions from the superior authority,” according to the ministry.

The ministry added that other communication channels are still open. South Korea’s defense ministry separately confirmed reports of having proposed holding military talks with North Korea.

Moon’s government had pinned hopes in the Kim-Trump summit for restarting two inter-Korea projects frozen due to political acrimony -- a joint factory park in Gaeseong and a mountain resort in North Korea.

The Gaeseong factory complex, which was supposed to be a model of economic cooperation for a unified Korea, closed about three years ago. Kim has also said he wants it open again, which would provide his cash-starved government with hard currency.

--With assistance from Jon Herskovitz.

To contact the reporter on this story: Jihye Lee in Seoul at jlee2352@bloomberg.net

To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Jon Herskovitz, Peter Pae

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