North Korea has agreed to send a delegation to next month's winter Olympics in South Korea - a diplomatic breakthrough during rare talks between the two rivals.
The Koreas held their first formal talks in more than two years.
During a meeting in the village of Panmunjom, which sits on the border, the two nations discussed next month's Winter Olympics in the South Korean county of Pyeongchang.
North Korea offered to send a delegation of high-ranking officials, athletes and a cheering squad to the event.
Meanwhile, South Korea proposed that athletes from both nations march together at the opening ceremony - bringing the prospect of improved ties after years of strained relations.
Seoul went on to suggest that military talks should take place with a view to reducing tensions on the Korean peninsula, and raised the prospect of resuming temporary reunions for families separated by war.
Citizens living in Pyongyang have said the talks - which follow an olive branch invitation from North Korean leader Kim Jong Un in an unusual New Year address - are encouraging.
One of them, Kim Ri Ah, said: "Every Korean really wants relations between the North and South to improve, it's urgent, it's an important thing that the whole nation should solve by coming together.
"Anything that provokes either side or creates obstacles to reunification should completely stop."
The meeting comes at a time of heightening tensions on the peninsula, with some of most bellicose rhetoric from the North and the US in living memory.
Recently, leaders have openly compared the size and effectiveness of their nuclear "buttons" to the dismay and alarm of hundreds of millions.
Those expecting an easing of tensions to follow these talks may need to manage their expectations.
A lot more than sport may be motivating Kim. He may be seeking to exploit tensions between the South and its patrons, the US, under Donald Trump.
South Korea's President, Moon Jae-in, has openly differed with Mr Trump by arguing for economic and diplomatic co-operation with North Korea, as the American president pushed for the opposite, over the isolated state's continuing missile and nuclear tests and progress towards a nuclear missile capable of hitting the US mainland.
Mr Moon also angered the Americans by claiming they had given him a veto over any US military action against the North.
Kim is likely to use these talks to drive a wedge between the South and the US - which he hopes might make it harder for sanctions to be tightened against his regime.
Sanctions, in particular Chinese restrictions on some fuel imports, are thought to be making life increasingly difficult for the Kim regime.
But he will also hope it makes preemptive military action against the North less likely.
Reports from Washington suggest policymakers and military planners are now preparing for what was previously unthinkable, a first strike US military operation against the North. That would most likely lead to a North Korean retaliation that would in turn kill tens of thousands in South Korea.
Some Trump officials have indicated that may be a price they are prepared to pay.
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