South Korea's Unification Minister Cho Myung-Gyun (L) shakes hands with North Korean chief delegate Ri Son-Gwon
North Korea will send its athletes to the Winter Olympics in the South, the rivals said Tuesday, after their first formal talks in more than two years following high tensions over Pyongyang's nuclear weapons programme.
At the meeting in Panmunjom -- the truce village in the Demilitarised Zone that splits the peninsula -- the two sides also decided to hold military talks and to restore a military hotline closed since February 2016.
It came after Seoul responded to a New Year speech by the North's leader Kim Jong-Un last week with an offer of high-level dialogue, and last week a civilian hotline was restored after an almost two-year suspension.
Seoul and Olympic organisers have been keen for Pyongyang -- which boycotted the 1988 Summer Games in South Korea's capital -- to take part in what they repeatedly proclaimed a "peace Olympics" in Pyeongchang next month.
But the North gave no indication it would do so until Kim's speech, pursuing its banned weapons programmes in defiance of United Nations sanctions, launching missiles capable of reaching the US and detonating its sixth and most powerful nuclear test.
"The North Korean side will dispatch a high-level delegation, National Olympic Committee delegation, athletes, cheerleaders, art performers' squad, spectators, a taekwondo demonstration team and a press corps and the South will provide necessary amenities and facilities," they said in a joint statement.
The US cautiously welcomed the talks, warning that the North's invitation to the Games must not undermine international efforts to isolate Kim's regime.
US officials would work with Seoul to ensure that the North's participation "does not violate the sanctions imposed by the UN Security Council over North Korea's unlawful nuclear and ballistic missile programs", the State Department said in a statement.
It added that President Trump and his South Korean counterpart Moon Jae-In had already agreed "to continue the campaign of maximum pressure on North Korea toward the goal of complete and verifiable denuclearization."
- 'New year's gift' -
For the talks, the North's delegation walked over the Military Demarcation Line marking the border to the Peace House venue on the southern side, just yards from where a defector ran across in a hail of bullets two months ago.
Looking businesslike, the South's Unification minister Cho Myoung-Gyon and the North's chief delegate Ri Son-Gwon shook hands at the entrance to the building, and again across the negotiating table.
Ri wore a badge on his left lapel bearing an image of the country's founding father Kim Il-Sung and his son and successor Kim Jong-Il, while Cho sported one depicting the South Korean flag.
"Let's present the people with a precious new year's gift," said Ri. "There is a saying that a journey taken by two lasts longer than the one travelled alone."
The atmosphere was friendlier than at past meetings, and Cho told Ri: "The people have a strong desire to see the North and South move toward peace and reconciliation."
But there was no mention in the joint statement of the proposal by Seoul to resume reunions of families left divided by the Korean War, which Pyongyang has previously refused to do unless several of its citizens are returned by the South.
Ri also told South Korean journalists that denuclearisation was not on the table and not an issue for the two to discuss.
"The target of all our nuclear and hydrogen bombs and ICBMs and all other sophisticated weapons is the US," he said. "These weapons are not aimed at our brethren."
There were "many problems" to settle between the two sides, he added, warning of "unexpected obstacles" down the road.
- 'Peace Olympics' -
Olympic organisers welcomed the North's participation in Pyeongchang and a Unification ministry official dubbed the Games "a Peace Festival".
International Olympic Committee president Thomas Bach said Pyongyang's decision to take part was a "great step forward in the Olympic spirit".
Only two athletes from the North have so far qualified for the Games, but hundreds of young female North Korean cheerleaders have created a buzz at three previous international sporting events in the South.
Any high-level delegation accompanying the team could include Kim's younger sister Yo-Jong -- a senior member of the ruling Workers' Party, according to South Korean reports.
The Unification ministry official said the meeting "laid the foundation for restoring the severed inter-Korean ties and normalising them".
UN Secretary-General Antonio Guterres also welcomed the progress, especially plans to hold military talks and reopen the military hotline.
"The re-establishment and strengthening of such channels is critical to lowering the risk of miscalculation or misunderstanding," his spokesman said in a statement.
It remains unclear when the proposed military talks -- which would be the first of their kind since 2014 -- would be held.
Lim Eul-Chul, a professor of North Korean studies at Kyungnam University in Seoul, said the North's participation would "help turn South Korean public sentiment about the North more favourable".
Pyongyang would then probably seek to resume lucrative joint economic projects, such as the suspended Kaesong industrial complex, he added -- although it is unclear whether that would be in compliance with UN sanctions.
Pyongyang's state media reiterated its condemnations of Trump on Tuesday, but Lim said the North "appears to be trying to use the improvement in ties with the South as a springboard to resume talks with the US, which holds the key to controlling or possibly easing sanctions."
The United States and South Korea agreed last week to delay their joint military exercises until after the Games, apparently to help calm nerves.