Seoul: High-level talks between the rival Koreas ended on Friday with a rare agreement to go ahead as planned with a reunion for divided families, despite the North’s objections to overlapping South Korea-US military drills.

The two sides also agreed to stop exchanging verbal insults and to continue their nascent dialogue at a convenient date, according to a joint statement read to reporters in Seoul by South Korea’s chief talks delegate Kim Kyou-hyun.

The agreement, which was also carried on the North’s official KCNA news agency, suggested a significant concession by North Korea which had wanted the South to postpone the February 24 start of its annual military drills with the United States until after the reunion.

The South had refused, arguing that the two issues — one humanitarian and one military — should not be linked.

The apparent concession and the commitment to continue what has been the highest-level official contact between the two countries since 2007, will fuel hopes that they might be entering a period of genuinely constructive engagement.

“Agreement was reached today after North Korea accepted our position that the family reunion event is important ... as the first step to build trust” Kim said.

It followed two days of talks on Wednesday and Friday in the border truce village of Panmunjom where the armistice ending the 1950-53 Korean War was signed.

The dialogue was the first substantive follow-up to statements by the leaders of both countries — South Korean President Park Geun-hye and the North’s Kim Jong-un — professing a desire for improved inter-Korean ties.

There had already been signs of a shift in the North’s position at Wednesday’s first round, when it demanded the military drills be postponed — a change from its usual position that they be cancelled entirely.

Seoul’s unequivocal rejection of any change to the drills’ schedule because of the family reunion was lent weight on Thursday by visiting US Secretary of State John Kerry.

Addressing a press briefing in Seoul, Kerry urged Pyongyang to act with “human decency” and not try to use “one (issue) as an excuse to somehow condition the other”.

Millions of Koreans were separated by the 1950-53 war, and the vast majority have since died without having had any communication at all with surviving relatives.

Kerry left for China on Friday morning following his brief stop in Seoul, where he had focused on efforts to curb North Korea’s nuclear weapons programme with Park and other officials.

While welcoming the North-South talks in Panmunjom, Kerry stressed that Washington was not ready to accede to Pyongyang’s demand that it get involved in direct negotiations.

“We’ve been through that exercise previously, we want to know that this is real,” he said, adding North Korea had to take “meaningful action” towards denuclearisation before a dialogue could begin.

“The US will not accept talks for the sake of talks,” he said.

North Korea and its main ally China have both urged a resumption of stalled six-party negotiations on the North’s nuclear programme, but South Korea and the US have resisted.

During his visit to China, Kerry indicated that he would push Beijing to do more to rein in Pyongyang’s nuclear ambitions.

“China has a unique and critical role it can play ... and no country has a greater potential to influence North Korea,” he said, praising moves by Beijing last year to help reduce tensions after Pyongyang carried out its third nuclear test.

An analysis of new satellite images posted on the 38 North website on Friday showed stepped up excavation activity at the North’s main nuclear test site, although there were no signs that any further test was imminent.