North Korea abruptly canceled the reunion of about 200 divided Korean families Saturday, days before the meeting was due to occur, officials say.
The event had stirred hopes of warming relations between the two Koreas, and Seoul denounced the cancellation as putting the countries into a "state of confrontation," South Korea's Yonhap news agency reported.
North Korea's Committee for the Peaceful Reunification of Korea said the reunion, set to occur in four days, was postponed until a "normal atmosphere" was in place for negotiations.
The North also postponed talks scheduled for October on reopening the mountain resort where the reunions were to be held. The resort has been closed since 2008 after a North Korean guard shot a South Korean tourist.
The reunions were last held in 2010.
The North accused its southern neighbor of trying to cause confrontation through its "ever-escalating war provocations." Pyongyang accused the South of conducting a "witch hunt" with the recent arrest of a South Korean lawmaker, Lee Seok-ki, The New York Times reported.
Lee is charged with urging 130 followers to help overthrow the South Korea in the event war breaks out with the North.
Despite the postponed gathering, more than 2,800 South Koreans traveled to North Korea in July, Yonhap said, citing information from the unification ministry.
No South Koreans entered the North in June, and the ministry attributed all of the renewed travel to people visiting an industrial complex in the North Korean border town of Kaesong.
North Korea shuttered the complex in April after Seoul conduct military drills with the United States.
South Korean business executives were allowed to visit the facility in July as the two governments negotiated how to reopen it.