The blue buildings belong to the UN and the grey buildings are for the North Koreans. They are not generally in such close proximity as these two buildings, but in the JSA (Joint Security Area) the soldiers spend time every day staring at the enemy. The JSA at Panmunjom is the only point of remotely diplomatic contact between the two nations. And it is remotely diplomatic. The rest of the border is not to be crossed under any circumstances.
The above picture shows the North Korean 'propaganda village' built near the demarcation to demonstrate (to envious South Korean eyes) the grandeur and lavish living enjoyed by the communists. In reality, much of the world fears that North Koreans starve to death in droves, suffer in poverty and probably receive little or nothing of the aid that is sent there from the rest of the world. Our guide informed us that the village is generally deserted and some of the buildings are only facades. The south has a similar village that exaggerates the green grass of democracy. A feisty little show of escalating nationalism left each village with an enormous flagpole.
Joie and I appreciated the chance to see this situation, this relic of a recent war. It boggles the mind to witness the tension there and the profound effort that is needed to keep a peace. The line is so arbitrary and artificial, a division that does not want to be there, and so many forces press to renew and resolve, one way or the other, a suspended conflict. As Robert Frost says, "Good fences make good neighbors."