North Korea and South Korea are close to agreement on resuming reunions of family members and economic exchanges.
The breakthrough came after the South Koran envoy, Mr Lim Dong-won, met North Korean leader Mr Kim Jong II.
Inter-Korean relations improved after a summit between their leaders in 2000, enabling the reunions of hundreds of families. But that stopped with a cooling of relations amid US-North Korea tension.
"Both sides are near agreement on several issues, including family reunions and economic co-operation," said South Korea's Unification Ministry spokesman Mr Kim Hong-je.
He said officials are meeting to put the agreement into writing before the envoy heads home later in the day.
The nations were divided in 1945, and about 37,000 US troops are stationed in South Korea as a deterrent against North Korea, a legacy of the 1950-53 Korean War.
Millions of Korean families remain separated - many of them elderly.
PA