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The trip to Kaesong by William Perry, who served in President Bill Clinton's administration, comes amid eased tensions on the Korean peninsula following a breakthrough deal last week in which North Korea agreed to take initial steps to dismantle its nuclear weapons program.

South Korea sees the high-profile industrial zone and a separate joint tourism venture at a mountain resort in the North as some of the most visible results of its efforts to reconcile with North Korea.

South Korea has continued the two projects despite U.N. sanctions imposed on North Korea over its Oct. 9 nuclear test.

The industrial complex, a few miles north of the Demilitarized Zone separating the two Koreas, is an ambitious experiment to marry South Korean technology and management expertise with North Korea's cheap labor.

The project "could be a model for many other programs in the future," Perry said earlier in a meeting with Sohn Hak-kyu, a South Korean opposition presidential aspirant.

The two joint projects have been a major source of hard currency for cash-strapped North Korea, providing it with at least $900 million since the late 1990s. The U.S. has criticized the projects, saying they funnel unmonitored money to North Korea that could be diverted to weapons programs.

Currently, 21 South Korean companies operate factories in the zone, employing about 11,000 North Korean workers, according to the Unification Ministry.

The two Koreas are still technically at war because the 1950-53 Korean War ended in a truce, not a peace treaty.