By Jon Herskovitz

SEOUL, March 26 (Reuters) - South Korea will this week resume aid to North Norea, suspended after its defiant missile and nuclear tests and despite international talks on ending Pyongyang's atomic arms ambitions hitting a wall.

South Korea will start shipping 300,000 tonnes of fertiliser on Tuesday in time for North's spring planting season. On Wednesday, it resumes a separate flood-aid package that includes food and concrete.

"We want to have more normal ties with the North," said a Unification Ministry official.

North Korea, meanwhile, will allow reunions by video for a few of the tens of thousands of families separated by the 1950-1953 Korean War to resume on Tuesday.

The resumption of aid follows North Korea's agreement at six-way talks in February to shut down it main nuclear reactor and source of its weapons-grade plutonium.

The talks among the two Koreas, China, Japan, Russia and the United States, however, ground to a halt last week with Pyongyang demanding the return of some $25 million of its offshore assets frozen due to suspected use in illicit activity.

South Korea, fearful of the impact of a collapse of the North's government and the hundreds of billions of dollars unification would cost, has sent a steady flow of aid across the border for years as part of its policy to help stability in the secretive state.

Impoverished North Korea depends on handouts from its main benefactors China and South Korea to feed its people and support an anaemic economy, but the aid has turned into a sore spot for Seoul.

President Roh Moo-hyun's government, facing a support rate of under 20 percent, has been criticised at home for giving away too much to the North for too little in return.

And U.S. officials charge that a mountain resort in the North run by an affiliate of the South's Hyundai Group may serve as a cash cow for Pyongyang's leaders.

Seoul cut off its regular shipments of rice and fertiliser after North Korea defied international warnings and fired a barrage of missiles in July 2006. International sanctions followed its nuclear test three months later.

North Korea, which suspended reunions of separated family members out of anger over Seoul's cut in food handouts, said it would resume face-to-face meetings in May.

The two Koreas are technically still at war because the Korean War ended in a truce and not with a peace treaty.

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