Korean officials hold key talks at Panmunjom

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Media captionKevin Kim in Seoul says there is "cautious optimism", as well as questions, over North Korea's agreement to the talks

Officials from North and South Korea have held their first government-level talks in more than two years.

The meeting - in the demilitarised zone between the two states - comes after months of rising tension and war-like gestures from both sides.

The officials met to discuss plans for a higher-level encounter between government ministers.

A South Korean spokesman told reporters that the talks in Panmunjom had gone smoothly, "without any argument".

The South Korean news agency Yonhap said the two sides had agreed to meet in Seoul on Wednesday.

South Korea had invited the North to high-level talks in Seoul, but Pyongyang said it wanted lower-level discussions first.

The new South Korean President, Park Geun-hye, has said she wants to build trust after a period of intense hostility under the previous administration.

Symbol of co-operation

Ties between the two Koreas deteriorated earlier this year in the wake of the North's nuclear test on 12 February.

Image caption South Korea sent three delegates to the meeting in Panmunjom

Pyongyang withdrew its workers from the Kaesong joint commercial zone in April, apparently angered by tightened UN sanctions in the wake of the nuclear test and annual South Korea-US military drills.

The zone, seen as a symbol of North-South co-operation, had run successfully just inside North Korea for more than eight years.

Around 53,000 North Korean workers are employed at the Kaesong factory complex by more than 120 South Korean factories.

The zone is a key source of revenue for the North and the biggest contributor to inter-Korean trade.

Last Thursday, the North offered talks with the South on the resumption of operations and said it would reconnect a Red Cross hotline if Seoul - which had been seeking such talks - agreed.

The talks in Panmunjom closely follow a summit in California between US President Barack Obama and Chinese President Xi Jinping.

Both leaders agreed that North Korea had to denuclearise and that neither country would accept North Korea as a nuclear-armed state, US National Security Advisor Tom Donilon said on Saturday.

China is seen as a key ally of Pyongyang.