"Japanese Embassy officials said in a meeting in late February they will accept a revocation of the building permit because the construction work cannot be started due to circumstances in their home country," said an official at the Jongno Ward Office, adding the cancellation was implemented in accordance with legal procedures.

Under local construction law, construction should start within one year after the building permit is granted. When it is inevitable, a postponement of the building permit can be requested.

Without requests for postponement, the permit may be canceled after two years.

In 2015, the Japanese Embassy dismantled its antiquated building on Yulgok Street in Jongno Ward and relocated to a nearby building.

At that time, the Japanese government said it will build a new embassy building on the former site with six floors above ground and three underground floors by 2020.

Officials at the Jongno Ward Office said they had asked the Japanese Embassy to start the new building's construction several times, but the Japanese mission failed to respond each time.

"Construction can start anytime if the building permit is obtained again, but there was no contact from the Japanese side after the cancellation," said the Jongno Ward official.

An official at the Japanese Embassy in Seoul said that Japan will review the construction issue "in consideration of various circumstances."

Watchers speculate that the Statue of Peace installed in front of the former embassy building to symbolize Korean victims of sexual slavery during Japan's colonial rule and a weekly protest rally by the slavery victims and their supporters there may have something to do with the construction delays.

The 1,382nd weekly protest rally by the victims, who are euphemistically called "comfort women," is to be held in front of the former site of the Japanese Embassy building at noon Wednesday.

The Statue of Peace was installed in December 2011 in commemoration of its 1,000th gathering.

The revocation of the constriction permit came as the taut Seoul-Tokyo relationship shows no signs of improvement amid their ongoing tussles over a series of historical and territorial issues stemming from Japan's 1910-45 colonization of the peninsula.

Last November, Seoul announced its decision to dissolve a foundation that Tokyo funded to support former South Korean sex slaves under a 2015 bilateral agreement. Tokyo saw the dissolution as a breach of the agreement.

A set of court rulings here last year against Japanese firms for colonial-era forced labor has further chilled bilateral ties.

South Korea's Supreme Court has recognized the individual rights of forced labor victims to claim damages. But Japan argues that all reparation-related issues were settled in a 1965 deal that normalized bilateral diplomatic ties.

Tokyo's persistent claim to sovereignty over South Korea's easternmost islets of Dokdo remains another diplomatic faultline.

Observers have raised concerns that persistent spats between the neighbors could undermine efforts for bilateral cooperation in South Korea's push for North Korea's denuclearization and a lasting peace on the divided peninsula. (Yonhap)