Argentina has called off talks with neighboring Uruguay in an ongoing dispute over the construction of two pulp mills along their border.

Argentine President Nestor Kirchner and his Uruguayan counterpart, Tabare Vazquez, had planned to meet this week. But the talks were postponed after Argentina rejected a decision by one of the pulp companies to stop construction for 10 days.

That company, Metsa-Botnia of Finland, previously said it would suspend construction of its pulp mill on the Uruguayan side of the border for 90 days to allow the two South American governments to address environmental concerns. Argentina said the company should have stuck to that timeframe.

Spain's Ence is building a second pulp plant in the same region. Both mills are being constructed along the Uruguay river, which divides Uruguay and Argentina.

Argentines living across the river fear the mills will damage their farmlands and pollute the air. Argentine protesters have blocked several bridges leading into Uruguay in recent months, triggering diplomatic tensions between the two nations.

Uruguay has defended the project as the largest industrial investment in its history.