The US and South Korea have agreed to suspend contentious military exercises off the Korean Peninsula until after the Winter Olympic Games in a sign that nuclear tensions with North Korea may be easing.

US President Donald Trump said on Twitter on Thursday that planned talks between Seoul and Pyongyang "are a good thing" as he praised the United States' "strong" stance and its willingness "to commit our total 'might' against the North".

The two Koreas restored a cross-border hotline on Wednesday that had been shut down since 2016. They also agreed to hold high-level talks next week - the first since 2015 - which will focus on "matters of mutual interest", including North Korea's participation in the Winter Olympics.

With all of the failed "experts" weighing in, does anybody really believe that talks and dialogue would be going on between North and South Korea right now if I wasn't firm, strong and willing to commit our total "might" against the North. Fools, but talks are a good thing! — Donald J. Trump (@realDonaldTrump) January 4, 2018

Trump and South Korean President Moon Jae-in discussed the situation on the peninsula in a phone call on Thursday.

"The two leaders agreed to de-conflict the Olympics and our military exercises so that United States and Republic of Korea forces can focus on ensuring the security of the Games," a White House statement said.

The decision to delay joint military exercises with South Korea wasn't a political gesture, US defence chief James Mattis said.

{articleGUID}

"For us, it's a practical matter," Mattis told reporters, noting the Olympics are South Korea's biggest event in terms of international tourism.

"We have at times changed the timelines on these [drills] for any number of reasons, so for us, this is the normal give and take that we have."

Trump and North Korean leader Kim Jong-un have exchanged a series of bellicose comments in recent months, raising alarm across the world. Both sides have threatened to destroy each other.

In a New Year address, Kim said he was open to dialogue with South Korea and could send a delegation to the Winter Olympics.

Kim added, however, he would push ahead with "mass producing" nuclear warheads in defiance of UN Security Council sanctions, and warned the entire United States was in range of missiles and a nuclear button was always on his desk.

Trump responded by mocking Kim as "Little Rocket Man", adding his nuclear button was bigger, more powerful, and worked.