North Korea on Friday suspended a joint tourism project with South Korea, citing fears of SARS (search), a South Korean government official said.

The move came amid heightened tensions over North Korea's reported acknowledgment that it has nuclear weapons during talks in Beijing with U.S. negotiators.

"The North Korean side told us that it has suspended the Diamond Mountain tourism project. It gave SARS as the reason, but we are trying to figure out its real intentions," said a spokesman at Seoul's Unification Ministry, speaking on condition of anonymity.

There have been no confirmed cases of SARS either in South Korea or North Korea (search).

Earlier this week, North Korea said it was tightening inspections at its sea ports, airports and check points on its borders with China and Russia to guard against the deadly respiratory disease.

The two Koreas began a cruise ship tour to the scenic Diamond Mountain on the isolated North's east coast in 1998. The project has provided the North with hundreds of millions of dollars in badly needed cash.

But recently the tour, run by South Korea's Hyundai conglomerate, has lost money because there were not enough tourists. But the project remains the only major economic contact between the two Koreas.