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SEOUL: The Democratic People's Republic of Korea (DPRK) said yesterday it would use nuclear weapons in a "merciless offensive" if provoked - its latest rhetoric apparently aimed at deterring any international punishment for its recent atomic test blast.

The tensions emanating from Pyongyang are beginning to hit nascent business ties with the South: a Seoul-based fur manufacturer became the Republic of Korea's (ROK) first company to announce on Monday it was pulling out of an industrial complex in the North's border town of Kaesong.

The complex, which opened in 2004, is a key symbol of rapprochement between the two countries but the goodwill is evaporating quickly in the wake of the DPRK's nuclear test on May 25 and subsequent missile tests.