SEOUL (Reuters) - A day of smiles and jokes at the first inter-Korean talks in two years quickly evaporated Tuesday night when the North’s chief negotiator threatened to walk out after the South Korean side brought up Pyongyang’s nuclear and missile programmes.

Head of the North Korean delegation, Ri Son Gwon exchanges documents with South Korean counterpart Cho Myoung-gyon after their meeting at the truce village of Panmunjom in the demilitarised zone separating the two Koreas, South Korea, January 9, 2018 REUTERS/Korea Pool

“We had started in a good spirit but this came to an icky mood,” North Korea’s lead delegate Ri Son Gwon complained in closing remarks.

His rebuke highlights the challenges that lie ahead for Seoul after the 11 hours of talks yielded agreements to hold military talks and facilitate North Korea’s participation in next month’s Winter Olympics in South Korea.

South Korean President Moon Jae-in attained his immediate goal of getting North Korea to participate in the games - and reducing the chance its leader Kim Jong Un would disrupt the event with another missile or nuclear test. But turning the winter thaw into a longer-term detente will be far more daunting.

To do so, Moon must navigate a volatile mix of mutually exclusive policies, including North Korea’s stance that its nuclear arsenal is non-negotiable and Washington’s equally strident insistence that complete denuclearisation is the only acceptable outcome.

Seoul has proposed that the two Koreas make a show of unity by marching together at the Pyeongchang Olympics. The last time they did that was in January 2007 at the Asian Winter Games in Changchun, China, just three months after North Korea conducted its first nuclear test.

The first U.N. sanctions against Pyongyang followed that nuclear test and over the next 12 years, international sanctions ramped up along with North Korea’s increasingly sophisticated missile and nuclear tests, a cycle that has left Pyongyang increasingly isolated. Along the way, six-country talks aimed at dismantling North Korea’s nuclear programme became moribund.

Participation in the Olympics would help ease the North’s isolation. And Pyongyang may hope South Korea could resume desperately needed economic aid at some point. Moon, after all, was once an advocate of former president Kim Dae Jung’s “sunshine policy” of reconciliation with the North.

“LARGER ISSUES”

Ri said he would not discuss North Korea’s nuclear weapons programme with the South because its nuclear bombs and intercontinental ballistic missiles (ICBM) are aimed “thoroughly” at the United States, not at its “brethren” in the South.

Seoul believes improved inter-Korean ties and a series of steps agreed on Tuesday could pave the way for discussion of a “fundamental resolution” of the nuclear issue in the future, the South’s unification ministry said on Wednesday.

But the two Korea’s can do little themselves about denuclearisation “without having the United States on board,” said Hwang In-sung, secretary-general of the secretariat of the presidential National Unification Advisory council in Seoul.

South Korea should not repeat past failures where seemingly vigorous talks fell apart and ties froze in a flash, he said.

“Given the mistrust and high bars set up by both North Korea and the U.S., we will need to drive the experience from Pyeongchang when it’s over, in a way that contributes to the opening of nuclear negotiations”, Hwang told Reuters.

The two Koreas initiated sports diplomacy in 1957 in an effort to form a unified team for the 1964 Summer Olympics in Tokyo. That effort, however, ended in failure.

Culture and sports diplomacy between them since then has followed the ups and downs of their Cold War-era relations. The two countries remain technically at war because the 1950-53 Korean War ended in an armed truce that has yet to be replaced with a peace agreement.

“Sports exchanges have their own limits given the complex dynamics surrounding the Korean Peninsula, but they can help rally public support and provide a boost for other serious issues to go forward”, said Lee Woo-young, a professor at the University of North Korean Studies in Seoul.

SPORTS AND AID

A high point came in 2000, when athletes from both sides marched together under a single flag depicting the Korean Peninsula during the opening ceremony of the Summer Olympics in Sydney.

Even back then, Seoul’s offer of economic aid in return to facilitate such events was a source of contention in South Korea, which has lived with military threats from the North for decades.

“While the hope is certainly that these things will lead to further political developments between the two, such cooperation has often ended without any larger-scale issues being solved”, said Benjamin Silberstein, associate scholar at the Foreign Policy Research Institute in Philadelphia.

“There are few signs to suggest that this time is any different, but it is still too soon to tell”.