After months of threats and military provocations, North Korea announced this morning the reopening of joint economic projects with South Korea. But any expectations of an improvement in relations with the isolated dictatorship were lowered when it threatened nuclear attack against South Korean and US forces undertaking a military exercise.

North Korea’s state media announced that it will resume a range of reconciliation activities, which have been suspended over the past year in an atmosphere of increasing tension between the two Koreas. Pyongyang will relax border restrictions on travel to and from the Kaesong Industrial complex, where 40,000 North Koreans are employed by South Korean companies. It will also resume reunions between elderly people separated by the 1950-53 Korean War, which divided the peninsula.

It will restart tours to the North’s Kumgang mountain holiday resort and the historic city of Kaesong, and allow South Korean visitors to visit country’s holiest mountain, Mount Paektu in the north of the country. But within a few hours, North Korea was making announcements in a more familiar tone – one of violent indignation against South Korean and US forces in the South,

Its fury was provoked by an annual series of computer simulated exercises called Ulchi Freedom Guardian, conducted over ten days by the US and South Korea. The North routinely accuses the two allies of using the exercise as a pretext for preparing an invasion.

"Should the US and South Korea commit even the slightest military provocation infringing upon [North Korea’s] sovereignty, it will mount a merciless and prompt annihilating strike at the aggressors with all offensive and defensive means including nuclear deterrent.” the Korean Central News Agency reported.

But the familiar bellicosity does not quite cancel out the unexpectedly positive news about the joint projects which emerged after a visit to Pyongyang by Hyun Jung Eun, the chairwoman of Hyundai, the company which operates the joint projects.

Ms Hyun met personally with the North Korean leader, Kim Jong Il, and secured the release of a Hyundai worker who had been detained after allegedly being overheard criticising North Korea. It comes two weeks after Bill Clinton took home two American journalists who had been convicted of illegally crossing into North Korea from China.

The motivation for sudden gestures of co-operation is difficult to identify, especially after such an extended period of confrontation with the outside world. North Korean diplomacy has always been moody and unpredictable, and this may be a deliberate strategy to keep its antagonists on the back foot.

It may also be driven by money. The tours to Kumgang, a range of famously beautiful mountains, have alone brought in some $410 million (£251 million) in revenues to the North Korean Government, excluding the value of the hotels and facilities created by Hyundai companies.

It was the South Korean Government which closed down the tours last summer after a middle-aged housewife who was on holiday in Kumgang was shot dead by a North Korean soldier after apparently wandering by accident into a restricted zone. Seoul would therefore have to give its approval to any resumption of the tours.

"We need concrete accords to be worked out through talks between the authorities of the two Koreas to implement this agreement,” a spokesman for Seoul’s Unification Ministry said. “The government will make active efforts to reach the accords between the authorities ... as early as possible.”

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