SEOUL (Reuters) – North Korea said on Tuesday it would sever hotlines with South Korea as the first step toward shutting down all contact.

The decision, announced by the KCNA state news agency, marks a new setback amid stalled efforts to persuade North Korea to give up its nuclear weapons.

For several days, North Korea has lashed out at South Korea, threatening to close an inter-Korean liaison office and other projects if Seoul does not stop defectors from sending leaflets and other material into the North.

Top North Korean officials, including leader Kim Jong Un’s sister, Kim Yo Jong, and Kim Yong Chol, vice chairman of the Central Committee of the ruling Workers’ Party, determined “that the work towards the South should thoroughly turn into the one against an enemy,” KCNA said.

As a first step, at noon on Tuesday, North Korea will close lines of communication at an inter-Korean liaison office, and hotlines between the two militaries and presidential offices, it said.

On Tuesday morning, North Korean officials did not answer a routine daily call to the liaison office, nor calls on military hotlines, South Korea’s defence ministry said.

A spokeswoman for the U.S. State Department said Washington was “disappointed” by North Korea’s recent actions.

“We urge (North Korea) to return to diplomacy and cooperation,” she said, adding that Washington and Seoul were coordinating closely on the issue.

On Monday morning, North Korea did not answer the liaison phone call for the first time since 2018, though it later answered an afternoon call.

South Korea’s unification ministry, which is responsible for inter-Korean dialogue, said routine South-North calls should be maintained as they are a basic means of communication.

The two Koreas remain technically at war because the 1950-1953 Korean War ended with an armistice rather than a peace treaty.

Shares of South Korea’s defence firms surged after North Korea announced it would sever the hotlines.

Analysts said the move was likely about more than the defectors, Pyongyang is under increasing economic pressure due to the coronavirus crisis and international sanctions.

“North Korea is in a much more dire situation than we think,” said Choo Jae-woo, a professor at Kyung Hee University “I think they are trying to squeeze something out of the South.”

Cutting communications is “a well-worn play for Pyongyang,” but one that can be dangerous, Daniel Wertz, of the U.S.-based National Committee on North Korea, wrote on Twitter.

“Regular communication channels are needed most during a crisis, and for that reason North Korea cuts them off to create an atmosphere of heightened risk,” he said.

KCNA accused South Korean authorities of irresponsibly allowing defectors to hurt the dignity of North Korea’s supreme leadership.

The people of North Korea have “been angered by the treacherous and cunning behaviour of the South Korean authorities, with whom we still have lots of accounts to settle,” it said.

“We have reached a conclusion that there is no need to sit face to face with the South Korean authorities and there is no issue to discuss with them, as they have only aroused our dismay,” KCNA said.