The two Koreas on Sunday opened a second day of talks on South Korea's Jeju Island to discuss increasing economic exchanges and cooperation.

In a keynote speech, Seoul strongly urged Pyongyang to proceed with test runs of inter-Korean railways that it canceled unilaterally last month.

South Korea also suggested the creation of an environment under which it can provide raw materials for North Korea's light industries, hinting at no such aid without the test runs.

North Korea simply responded by saying it is "not desirable" for the two sides to continue to debate the cancellation, and urged immediate cooperation in the North's light industries and natural resource development.

Pyongyang also offered joint timber activity and coal mining in Russia's Far East and "serious cooperation" in fisheries and sand digging at the mouth of the Han River flowing through both Koreas.

A South Korean negotiator said the meeting was held under a "heavy" atmosphere.