North Korea exploded an inter-Korean liaison office building just north of the tense Korean border on Tuesday, South Korea said.

Seoul's Unification Ministry says the destruction of the building at the North Korean border town of Kaesong happened at 2:49 p.m. Tuesday.

North Korea confirmed it has destroyed the inter-Korean office and cut all communication lines with South.

North Korea had earlier threatened to demolish the building as it stepped up its fiery rhetoric over Seoul's failure to stop activists from flying propaganda leaflets across the border.

Some experts say North Korea is expressing its frustration because Seoul is unable to resume joint economic projects due to U.S.-led sanctions.

(With inputs from Associated Press)