North and South Korea agreed in principle Thursday to hold their first official talks for years, signalling a possible breakthrough in cross-border ties after months of escalated military tensions.

A surprise offer from Pyongyang proposed discussions on a range of commercial and humanitarian issues, from reopening a joint industrial complex to resuming cross-border family reunions.

The South replied within hours, with the Unification Ministry saying it viewed the offer "positively" and would announce a date, venue and agenda later.

"We hope that South and North Korea can build trust through this opportunity," the ministry added.

China, the North's sole major ally, reacted positively.

"China is happy and welcomes that the DPRK and ROK (North and South Korea) agreed to resume their engagement and dialogue," said foreign ministry spokesman Hong Lei.

Analysts also welcomed the development but some advised caution, saying the precise nature and agenda of the dialogue might create insurmountable sticking points.

"I think this is an attempt by the North to seize the initiative, but it's premature to say whether the offer is likely to lead to a sincere dialogue," said Yang Moo-Jin, a professor at the University of North Korean Studies in Seoul.

Official contacts between Seoul and Pyongyang have been essentially frozen since South Korea accused the North of torpedoing one of its warships in March 2010 with the loss of 46 lives.

April and May this year saw tensions soar to worrying levels as the North, angered by joint South-US military drills and UN sanctions imposed after its nuclear test in February, threatened pre-emptive nuclear strikes.

The situation has calmed in recent weeks, with both sides circling warily around the idea of opening some sort of dialogue.

The North's proposal, carried in a statement from the Committee for the Peaceful Reunification of Korea (CPRK), said the venue and date for talks "can be set to the convenience of the South side".

Initial subjects for discussion would be the Kaesong joint industrial zone, which was closed at the height of the recent tensions, and the resumption of cross-border tours to the North's Mount Kumgang resort, the CPRK said.

Humanitarian issues such as reuniting family members separated after the 1950-53 Korean War could also be discussed.

The CPRK said a positive response would see the North consider rolling back measures it took when relations went into a tailspin in April, including restoring a cross-border hotline.

South Korea had already offered working-level talks on Kaesong and Seoul is likely to be wary of agreeing to a much wider-ranging agenda.

While President Park Geun-Hye has spoken of the need for dialogue, she has made it clear -- with US backing -- that substantive talks would require the North to show commitment to abandoning its nuclear weapons programme.

Pyongyang has repeatedly insisted that its nuclear deterrent is not up for negotiation.

"There could be some trouble in setting the agenda, and it's natural to doubt North Korea's sincerity," said Paik Hak-Soon, an analyst at the Sejong Institute think-tank in Seoul.

"But this a typically strategic change of direction by the North, which puts the ball in the South's court and I think it presents a genuine opportunity," Paik said.

The Kaesong complex, established inside North Korea in 2004, was the most high-profile casualty of the recent tensions.

Born out of the "Sunshine Policy" of inter-Korean reconciliation initiated in the late 1990s by South Korean president Kim Dae-Jung, Kaesong was a crucial hard currency source for the impoverished North, through taxes and revenues and its cut of workers' wages.

Operations ground to a halt after the North pulled all its 53,000 workers out in early April. The South withdrew its managers and officials soon afterwards.

An association of South Korean businessmen who run factories in Kaesong welcomed the North's proposal and called for the quick opening of dialogue. "We welcome North Korea's proposal and South Korea's positive response," it said in a statement.

The Mount Kumgang resort, developed by the South's Hyundai Asan company, opened in 1998 as a symbol of reconciliation. It once earned the North tens of millions of dollars a year.

But Seoul suspended tours by its citizens after a North Korean soldier shot dead a South Korean housewife there in July 2008. In response the North scrapped a deal with Hyundai Asan and seized its properties there.

Hundreds of thousands of family members were separated by the Korean War, and the last temporary reunions took place in 2010.

Nearly 80,000 people in the South alone are on the waiting list for reunions should they resume.

Timeline of tensions between two Koreas
Seoul (AFP) June 06, 2013 - North and South Korea tentatively agreed on Thursday to hold their first official talks for years, which could lead to warmer relations after months of escalated military tensions.

Below is a timeline of key threats and actions dating from the accession to power of North Korean leader Kim Jong-Un.

2011

Dec 19: Kim Jong-Un, in his late 20s, is named leader of North Korea following the death of his father, Kim Jong-Il.

2012

Dec 12: North Korea successfully launches a three-stage rocket and puts a satellite in orbit. Seoul, Washington and the UN condemn the launch as a covert ballistic missile test.

2013

Jan 22: UN Security Council passes a resolution condemning North Korea's rocket launch and tightens existing sanctions.

Feb 12: North Korea conducts a third nuclear test.

Feb 26: Kim Jong-Un oversees a live-fire artillery drill aimed at simulating an "actual war".

March 1: South Korea and US launch annual "Foal Eagle" joint military exercise.

March 5: North Korea says it will scrap armistice that ended the 1950-53 Korean War.

March 7: North Korea threatens a "pre-emptive" nuclear strike against the United States and South Korea. United Nations adopts tougher sanctions on Pyongyang over its nuclear test.

March 8: North Korea announces the voiding of non-aggression pacts with South Korea and severs a government hotline with Seoul. Kim Jong-Un tours frontline island units and vows "all-out war".

March 12: Kim Jong-Un threatens to "wipe out" South Korean island of Baengnyeong.

March 18: US Deputy Defense Secretary Ashton Carter promises to provide South Korea with every military resource under the US nuclear umbrella.

March 26 : North Korea's military puts its "strategic" rocket units on a war footing, with fresh threat to strike targets on the US mainland, Hawaii and Guam and South Korea.

March 27: North Korea cuts last remaining military hotline with South Korea.

March 28: United States deploys two nuclear-capable B-2 stealth bombers on "deterrence" missions over South Korea. Defense Secretary Chuck Hagel says US ready for "any eventuality."

March 29: Kim Jong-Un, vowing to "settle accounts", orders missile units to prepare to strike US mainland and military bases in the Pacific.

March 30: North Korea declares it has entered into a "state of war" with South Korea.

April 2: Pyongyang says it will restart the Yongbyon reactor, its source of weapons-grade plutonium. The United States deploys a sophisticated radar off Japan and sends a second destroyer to the region.

April 3: The North prevents South Korean staff from entering the Kaesong joint industrial park.

April 5: Pyongyang moves a medium-range missile to its east coast and warns foreign embassies it is unable to guarantee their safety after April 10.

April 6: The Pentagon delays an intercontinental ballistic missile test to take place in California in a gesture aimed at easing tensions.

April 8: North Korea says it will withdraw all workers from Kaesong and suspend operations there.

April 9: Japan deploys Patriot missile interceptors in Tokyo. South Korea pulls out its last remaining workers from Kaesong.

May 18: North Korea launches three short-range missiles into the Sea of Japan as part of a military drill.

May 27: South Korea brushes off an apparent offer by North Korea to resume nuclear disarmament talks.

June 3: A US think tank says North Korea might be just one or two months away from restarting a reactor to produce plutonium.

June 6: A surprise proposal from Pyongyang to discuss a range of commercial and humanitarian issues elicits a positive reply within hours from Seoul.