The Korea National Tourism Organization says it held discussions with North Korean officials back in July on the North's proposal to establish a Mount Baekdu tourism project.

The state-run tourism agency said Tuesday that the North had offered to grant it exclusive rights to run a tour to the highest mountain on the Korean Peninsula if the agency agreed to invest some 3.8 million dollars in the renovation of Samjiyeon Airport near the sacred mountain.

The KNTO said that negotiations on the proposal are deadlocked now after the two sides failed to narrow differences on some details.

An organization official was quick to hint, however, that talks could resume, depending on developments in inter-Korean relations.

Mount Baekdu, located on the border between North Korea and China, is the highest peak in Korea at 2,744 meters, and topped by a volcanic lake.