North and South Korea have begun high-level talks, the first between the countries in two years.
The meeting, at the Peace House in the truce village of Panmunjom, will focus on North Korea's possible participation in the 2018 Winter Olympic Games, taking place in South Korea in February.
South Korea also said it would raise ways to improve inter-Korean relations.
Ties have become increasingly tense since the last talks in 2015.
Relations broke down after Seoul suspended a joint economic project at the Kaesong Industrial Complex in North Korea following a rocket launch and nuclear test by the North.
The incident led to North Korea ending all communication with Seoul, including cutting off telephone lines. Tensions have risen in the years since as the North continues to rapidly advance its banned weapons programme.
Both sides have sent a five-member delegation to the talks, who spoke to media ahead of the session.
Seoul's Unification Minister Cho Myoung-gyon, who is leading the delegation, said the Pyeongchang Games would "become a peace Olympics as most valuable guests from the North are going to join many others from all around the world".
"The people have a strong desire to see the North and South move toward peace and reconciliation," Mr Cho added.
The South has labelled the upcoming Winter Games the "peace Olympics" with President Moon Jae-in saying it a "groundbreaking chance" to improve relations between the Koreas.
The North's delegation is led by Ri Son-gwon, the chairman of North Korea's state agency in charge of affairs with the South and a veteran negotiator.
"We came to this meeting today with the thought of giving our brethren, who have high hopes for this dialogue, invaluable results as the first presentation of the year," said Mr Ri at the start of the talks.
His South Korean counterpart also similarly expressed optimism.
"Our talks began after North and South Korea were severed for a long time, but I believe the first step is half the trip," said Mr Cho.
North Korean leadership expert Michael Madden told the BBC that we were seeing the "baby steps of incremental rapprochement".
"Both Koreas are proceeding cautiously, but what they would like to see happen is [the meeting] becoming a springboard for further contacts and interactions," Mr Madden said.
The delegates are meeting in Panmunjom village that lies in the heavily guarded demilitarised zone (DMZ) and is where the two sides have historically held talks.
What is the significance of Panmunjom?
After the Korean war ended in a truce in 1953, Panmunjom was designated as the one place where officials from both sides could meet.
The "truce village" is divided into two parts by a military demarcation line: one side belonging to the North, the other to the South.
In the middle of the village sit the UN Command buildings, crossing the middle of the line.
Last year, a North Korean defector made a dash through the DMZ, managing to cross over to the South Korean side of Panmunjom.
'Great thing for all humanity'
The high-level talks were agreed after North Korean leader Kim Jong-un said he was considering sending a team to the Olympics in Pyeongchang in his New Year address.
The move led to North Korea restoring a telephone hotline to South Korea, enabling the first contact about holding talks.
US President Donald Trump called the talks a "big start", adding that it would be a "great thing for all of humanity" if they resulted in a positive outcome.