South Korea has offered high-level talks with rival North Korea to find ways to co-operate on next month's Winter Olympics in the South.
Seoul's quick proposal after a rare rapprochement overture from Pyongyang a day earlier offers the possibility of better ties after a year which saw a nuclear stand-off increase fear of war on the Korean Peninsula.
In a closely watched New Year address, North Korean leader Kim Jong Un said on Monday he is willing to send a delegation to the Olympics, though he also repeated nuclear threats against the United States.
Analysts said Kim may be trying to drive a wedge between Seoul and its ally, Washington, as a way to ease international isolation and sanctions against North Korea.
Kim's overture was welcome news for the South Korean government led by liberal President Moon Jae-in, who favours dialogue to ease the North's nuclear threats and wants to use the Olympics as a chance to improve inter-Korean ties.
Moon's unification minister, Cho Myoung-gyon, proposed in a nationally televised news conference that the two Koreas meet on January 9 in the shared border village of Panmunjom to discuss Olympic co-operation and how to improve overall ties.
Earlier on Tuesday, Moon spoke of Kim's positive response to earlier South Korean dialogue overtures and ordered officials to study how to restore talks with North Korea and get the North to participate in the Olympics.
North Korea did not immediately respond. But if there are talks, they would be the first formal dialogue between the Koreas since December 2015.
Relations between the Koreas have plunged as North Korea under Kim expanded its weapons programmes amid a hard-line stance by Moon's conservative predecessors.
Last year, North Korea carried out its sixth and most powerful nuclear test and test-launched three intercontinental ballistic missiles as part of its push to possess a nuclear missile capable of reaching anywhere in the United States.
The North was subsequently hit with toughened UN sanctions, and Kim and US President Donald Trump exchanged warlike rhetoric and crude personal insults against each other.
Possible inter-Korean talks could provide a temporary thaw in strained inter-Korean ties, but could also weaken US-led international pressure on the North.
After the Olympics, inter-Korean ties could become frosty again because North Korea has made it clear that it has no intention of accepting international calls for nuclear disarmament and instead wants to bolster its weapons arsenal in the face of what it calls increasing US threats.
In his address on Monday, Kim said the United States should be aware that his country's nuclear forces are now a reality, not a threat. He said he has a "nuclear button" on his office desk, warning that "the whole territory of the US is within the range of our nuclear strike".
He called for improved ties and a relaxation of military tensions with South Korea, saying the Winter Olympics could showcase the status of the Korean nation. But Kim still said South Korea must stop annual military exercises with the United States, which he calls an invasion rehearsal against the North.
The New Year address is an annual event in North Korea and is watched closely for indications of the direction and priorities Kim may adopt in the year ahead.