South Korea's decision to shut down an inter-Korean industrial complex in North Korea is "consistent with" the international community's view that more steps are necessary to persuade Pyongyang to give up its nuclear and missile programs, a senior U.S. official said Wednesday.

"I know this was not an easy decision for the government of the Republic of Korea to take and therefore the fact that they made this decision is a compelling indicator of the seriousness with which they regard the provocative steps taken by the DPRK," Assistant Secretary of State Daniel Russel said during a Foreign Press Center briefing.

"It is a decision that's consistent with the widespread view in the international community that more steps are needed to convince the DPRK leadership that it is not going to be possible to have access to the international economic system let alone economic or financial aid as long as North Korea continues to pursue nuclear and missile programs in direct contravention of U.N. Security Council resolutions," he said.

South Korea announced earlier Wednesday it will suspend the operation of the Gaesong Industrial Complex in response to the North's nuclear and missile tests. The decision was seen as the strongest non-military measure South Korea could take to punish Pyongyang.

The complex, which combines South Korean capital and cheap North Korean labor, is considered the last-remaining symbol of inter-Korean reconciliation, but has long been accused by conservatives of being used to fund the North's nuclear and missile programs.

Seoul's unification minister, Hong Yong-pyo, said the factory park is seen as being used for Pyongyang's development of nuclear weapons and long-range missiles and therefore decided to halt it to prevent South Korean money from being funneled into weapons development.

A total of 124 South Korean companies are operating in the zone in the North's border city of Kaesong, some 50 kilometers northwest of Seoul, employing more than 54,000 North Korean workers to produce labor-intensive goods, such as clothes and utensils.

The complex, which opened in 2004, has served as a major revenue source for the cash-strapped North, while South Korea has benefited from cheap but skilled North Korean labor. The South Korean firms annually provide about US$100 million in total to North Korean workers for income. (Yonhap)