North and South Korea agreed on Friday to hold border talks next week amid signs of the first major thaw in relations between the two nations in two years.

The agreement to hold negotiations on Tuesday at the border village of Panmunjon was announced just hours after Washington and Seoul agreed to postpone joint military exercises until after the Winter Olympics in the South Korea resort of Pyeongchang in February.

The initial meeting will focus on the North’s possible participation in the Olympics, but it is hoped that talks can be expanded to deescalate tensions that have been building over Pyongyang’s accelerating nuclear and weapons programme.

The first sign of a shift in the frozen ties between the neighbouring countries came in a New Year’s Day speech by North Korean leader Kim Jong-un where he made overtures towards easing relations through dialogue and by sending an Olympic delegation.

This prompted a swift offer from the South to open talks next week and a flurry of diplomatic interactions, including the opening of a telephone hotline in Panmunjon after it had lain dormant for almost two years.

It is believed that it was through this hotline that North Korea told the South that it would agree to meet at the border village, which is divided by a military demarcation line, and is the only place in the Demilitarised Zone where soldiers from both sides stand just feet from each other.