North Korea has expressed regret for a naval clash with South Korea in June and has proposed a resumption of talks.
In the clash, one South Korean naval patrol boat sank, killing four sailors and wounding 19 others. One was listed as missing. North Korea said it also suffered casualties but did not say how many.
"North Korea proposed joint efforts to prevent such incidents from happening again," South Korean minister Mr Kim Hyong-gi told local reporters.
North Korea had warned yesterday new naval clashes could break out with South Korea unless the US-led United Nations Command abolishes what the North called an illegal border drawn in the Yellow Sea.
The development is a boost for President Mr Kim Dae-jung, whose "sunshine" policy of engaging North Korea has stalled since last year, partly because of tension between the North and the United States.
North Korea also proposed the resumption of working-level talks in early August at the Diamond Mountain resort on the east coast of the communist country, Mr Mr Kim Hyong-gi said.
The talks would set the stage for Cabinet-level negotiations to be held in Seoul, Mr Kim quoted North Korean negotiator Kim Ryong-song as saying in a letter.
AP