North Korean authorities today banned South Korean workers from entering the Kaesong Industrial Zone, an inter-Korean project just above the border.
The move was widely expected as Pyongyang has slowly ratcheted up tensions with a series of threats in the past few months, putting the South Korean government on edge over the safety of more than 800 workers still inside North Korea.
"We should stop this from going into the worst-case scenario," South Korean Defense Minister Kim Kwan-Jin said at a meeting of ruling party lawmakers. "But in case of crisis, we consider all options, including military actions".
Alongside the launch of its long-range missiles in December and a third nuclear test in January, North Korean rhetorical threats have been non-stop in recent weeks.
Its leader, Kim Jong Un, has vowed to launch a pre-emptive nuclear strike on the United States and South Korea in protest of the latest U.N. sanctions -- targeting the luxury goods presumably used by Kim's family and Pyongyang's privileged officials -- and the annual U.S.-South Korean military drills.
Forty-six South Korean workers and 28 vehicles are expected to return to the south today, smaller than expected because the South Korean companies opted to keep workers there to keep business production afloat. A total of 822 South Koreans and seven foreign workers are expected to stay inside the Kaesong complex as for now.
"This is just another one of their brinksmanship moves," said Yang Moo-Jin, professor of inter-Korean relations at the University of North Korean Studies in Seoul. "I don't see them destroying the project but rather as a way to threaten and put pressure on the South Korean government."
The inter-Korean industrial complex is an economic joint venture conceived in 1998 to utilize South Korean capital and North Korean labor in an effort to promote collaboration and peace. About 123 South Korean companies produce a variety of labor-intensive products such as shoes, clothing, electronic goods and chemical products.
Several hundred South Korean workers shuttle back and forth across the border every day, including vehicles to deliver raw materials, machinery, finished products and food for the laborers.
The project is an important source of revenue for cash-stricken North Korea. Generating $2 billion a year in trade, more than 50,000 North Korean workers make $92 million in wages, which many suspect trickles into the regime rather than the workers' families.
"South Korean media reports have been sarcastic over why Kim Jong Un is keeping Kaesong open while talking of war and cutting ties," Shin Beom-Chul, director of North Korea Military Studies at Korea Institute of Defense Analyses, said. "They are trying to prove [with today's move] that look, if that's what you ask for, we could shut it down."
North Korean experts in Seoul have warned that Pyongyang can be extremely sensitive when it comes to hurting their pride.
"The most crucial [things] at this point, in their view, are the stability of Kim's regime and bestowing strong leadership, or at least the perception of Kim [being] capable of leading the people," Jeung Young-Tae, senior research fellow at Korea Institute for National Unification, said. "These series of threats are their own way of maintaining the power seat, by keeping the sense of crisis ongoing for internal purposes."
This is the second time North Korea shut down borders to Kaesong commuters. The last time was in March 2009, also in protest to the annual U.S-South Korean military drills. Hundreds of South Korean workers were stranded in the park for four days with dwindling supplies that could not be restocked because of the blockade. They were allowed to return home as soon as the military exercises were over.
The South Korean government expressed "deep regret" to the entry ban and urged it to be lifted immediately.
"In order to promote investment in North Korea as North Korea itself hopes, it is necessary for North Korea to build trust not only with the South, but also with the international community," Kim Hyung-suk, spokesman for South Korea's Ministry of Unification, said.
In an official statement, the ministry pointed out that North Korea should be "more predictable" in doing business to attract investments from abroad and warned the second ban today will have "negative repercussions."
ABC News' Cho Long Park and Joanne Kim contributed to this report.