North and South Korea agreed to hold talks about reopening a jointly-run industrial estate which had shut down amid high military tensions.
The agreement follows months of friction and threats of war by Pyongyang, after its February nuclear test attracted tougher UN sanctions.
The announcement came a day after the North restored a cross-border hotline and said it would let the South’s businessmen visit the Kaesong estate just north of the border to check on their closed factories.
The South’s unification ministry had responded by suggesting a working-level meeting at the border truce village of Panmunjom on Saturday.
After some dispute about the venue, the North accepted the South’s proposal, a ministry spokesman told AFP.
Plans for high-level talks last month on the future of the estate, which has been shut since April, had collapsed at the last minute due to a protocol dispute.
The Kaesong estate, where 53,000 North Koreans worked in 123 Seoul-owned factories, is the last remaining symbol of cross-border reconciliation and a valuable source of hard currency for the impoverished North.
It was the most high-profile casualty of the months of elevated tensions that followed the North’s third nuclear test, the subsequent tightened UN sanctions and US-South Korean military exercises.
After repeatedly threatening Seoul and Washington with conventional and nuclear attack, Pyongyang in recent weeks appears to want to shift to dialogue.
Professor Yang Moo-Jin of the University of North Korean Studies in Seoul said the agreement boded well for better cross-border ties.
“This is a good sign. The two Koreas will be able to improve relations if they reach an agreement at the upcoming meeting,” he said.
Professor Kim Yong-Hyun of Seoul’s Dongguk University had earlier said he expected a positive response from the North as it tries to improve its people’s living standards and attract foreign investment to special economic zones elsewhere.
Pyongyang is also mindful of a US demand that it improve ties with Seoul before any talks with Washington, said Professor Koh Yu-Hwan of the same university.
After last month’s fence-mending meeting with Seoul failed to go ahead, Pyongyang proposed direct, high-level dialogue with Washington.
In an apparent bid to press it to talk, the North this week allowed a pro-Pyongyang paper to release a video and interview with an American sentenced to hard labour for alleged subversion.