SEOUL, South Korea (AP) - South Korea’s unification minister urged North Korea on Monday to return to negotiations and stop threatening to halt the operation of a joint industrial complex on the divided peninsula.

The North announced Friday that it was canceling what it calls "preferential" contracts for South Korean companies operating in the factory park in Kaesong, just north of the border. The North said it will write new rules governing the complex and the South must accept them or pull out of the zone.

The North’s announcement signals a sharp raise in taxes, rent and wages at the complex - a move that would significantly reduce the appeal of operating factories in the North, where arbitrary border restrictions and closures have meant losses for South Korean companies.

On Monday, South Korea’s Unification Minster Hyun In-taek said the North should reverse the move and comply with previous accords on the complex - the last major remaining reconciliation project between the divided countries.

"Now, the Kaesong complex is facing a crisis," Hyun told a forum in Seoul.

"There should be a frank, sincere dialogue between South and North Korea," Hyun said.

Relations between the two Koreas have significantly frayed since a pro-U.S, conservative government took office in Seoul last year with a tougher policy on the North. Since then, reconciliation talks have been cut off and all key joint projects except the factory park have been suspended.

The industrial park opened in 2004 at a time of budding reconciliation between the Koreas. More than 100 South Korean companies employ some 38,000 North Koreans at the zone to make everything from electronics and watches to shoes and utensils, providing a major source of revenue for the cash-strapped North.

A South Korean man working at the complex has been detained by North Korean authorities since late March for allegedly denouncing the regime’s political system. Hyun on Monday again demanded his release.

Last month, the two Koreas held their first government-level talks in more than one year, but there was little progress, with the North demanding higher wages and rent for companies operating at Kaesong and refusing to free the detained worker.