North Korea said Thursday there was no need for further dialogue with "traitors" in South Korea, a day after the collapse of military talks aimed at easing months of high tensions.

The two-day talks were the first since the North's shelling of a South Korean island on November 23, which killed four people including two civilians and briefly raised fears of all-out war.

Pyongyang's delegation, in a statement carried by the official news agency, blamed a plot by the South Korean "group of traitors" including the defence and unification ministries for the collapse of the talks.

"The army and people of (North Korea) do not feel any need to deal with the group of traitors any longer, now that they do not wish to see North-South relations improved but totally reject dialogue itself," it said.

Despite the tough language, analysts said both sides have reasons to return to talks.

"We are still keeping the door open (to dialogue). We will wait and see," said the South's Unification Minister Hyun In-Taek.

But it was unclear how North and South could reconcile their positions.

Apart from the artillery fire near the disputed Yellow Sea border, Seoul accuses its neighbour of torpedoing a warship in March last year close to the border with the loss of 46 lives.

The North flatly denies involvement in the ship sinking, and says its bombardment of Yeonpyeong island was a self-defensive measure in response to a South Korean live-fire drill there.

The North's negotiators walked out of the talks Wednesday after rejecting the South's demands for an apology for both incidents, the South's defence ministry said.

The meeting at the border village of Panmunjom had been intended to set the agenda and date for high-level military dialogue.

The North says future talks should focus not on the incidents but on general ways to avoid provocations by either side.

The US State Department said the North's walkout was a "missed opportunity" to show it is sincere about improving ties.

The breakdown of the talks complicated efforts by the United States and China to revive stalled six-party talks, which also include Japan and Russia, on the North's nuclear weapons programmes.

Washington says Pyongyang must improve ties with Seoul before the six-party negotiations -- which offer diplomatic and economic benefits in return for denuclearisation -- can resume.

China's foreign ministry urged the Koreas to put differences aside and resume dialogue.

"We hope the two sides can maintain the momentum of dialogue and contact, meet each other halfway and work together to play a constructive role in improving relations and safeguarding peace and stability on the peninsula," spokesman Ma Zhaoxu said.

Scott Snyder, head of the Asia Foundation's Center for US-South Korea Policy, said both Koreas have reason to restart dialogue but appear to be "talking past each other".

The North needed to relieve food shortages and expand economic aid from the South to avoid excessive dependence on China, he wrote on the Council on Foreign Relations website.

The South was under international pressure to resume talks following a joint US-Chinese call last month for dialogue. It also faced public concern about tattered inter-Korean ties ahead of next year's parliamentary and presidential elections.

Yang Moo-Jin of Seoul's University of North Korean Studies said both sides would likely return to the table after a cooling-off period, since both need dialogue and feel pressure from China and the United States.

But Kim Yeon-Chul of Inje University in Gimhae city said the North was unlikely to accept responsibility for the warship incident, especially after a UN Security Council statement had failed to identify who was responsible.

"Even if the North comes back to dialogue, no progress is expected as long as the South lumps the sinking and shelling incidents together and demands an apology," Kim told AFP.

"The North is willing to apologise over the shelling but it will never accept responsibility for the sinking."