North Korea has pulled out of a liaison office with South Korea, in a major setback for Seoul.
The news came just hours after the United States imposed its first new sanctions on the North, and that after the second U.S.-North Korea summit broke down last month in Hanoi.
The joint liaison office was set up in September in the border city of Kaesong, following last year's historic summit between North Korean leader Kim Jong Un and South Korea's President Moon Jae-in.
The office set up a regular communications channel between the two rivals, which technically are still at war.
And, the North's decision to quit came after the U.S. blacklisted two Chinese shipping companies it says helped North Korea evade sanctions over its nuclear program.
It was the first such step since last month's meeting between Kim Jong Un and U.S. President Donald Trump.
That broke down over conflicting demands by the North for relief from sanctions, and from the United States for Pyongyang to give up its nuclear weapons.
The North's withdrawal from the office was also another blow to Moon, who has seen his standing as a mediator between Pyongyang and Washington deteriorate, and divisions grow within his own government over how to break the impasse.
But South Korea says it would not directly link the North's move to the failed Hanoi summit.