North and South Korea have agreed that athletes from the two countries will form unified teams and compete in several sports together at the 2018 Asian Games, as Seoul and Pyongyang look to solidify recent diplomatic gains.

It appears sports will be a crucial component in the diplomatic efforts between both nations, as tensions continue to thaw on the Korean peninsula. North Korean leader Kim Jong-un, who is reportedly an avid fan of basketball, called for a friendly game between the North and South to help mark the anniversary of the first inter-Korean agreement of reunification on 4 July 1972. The latest agreement comes as Washington looks to press ahead with further talks with Pyongyang about the status of their nuclear weapons programme.

Both sides agreed at a round of talks on their heavily fortified border to hold a series of basketball matches in the North Korean capital of Pyongyang on 3 July to 6 July.

“The South and the North will continue to form unified teams for other international sporting events... while holding joint training to strengthen inter-Korea cooperation and exchanges,” a statement put out by the countries said.

Meanwhile, the Korean athletes at the 2018 Asian Games will march together at the opening and closing ceremonies under a unified flag, as they did at the recent Winter Olympics in Pyeongchang.

“Today's meeting was to follow up on the achievement we made during the recent Olympics by boosting more regular, various sports exchanges including friendly matches, joint participation in global events and joint training,” said Lee Hae-don, a South Korean official who participated in the talks at the border village of Panmunjom.

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The closer ties come after a number of meetings between South Korean President Moon Jae-in and the North Korea's Mr Kim, with both agreeing to joint participation in “international sports events such as the 2018 Asian Games” during a historic summit in April. Both countries also announced they would work together to formally end the 1950-53 Korean war, establishing a “peace zone” along the contested border. That agreement received a “blessing” from President Donald Trump.

Mr Trump met with Mr Kim in June, when the two signed an agreement to work “towards the complete denuclearisation of the Korean Peninsula,” representing a monumental shift in their relationship from just months before, when North Korea was testing its missile capabilities at an unprecedented rate and the American president was unleashing threats and insults towards the dictator via Twitter. Still, the non-binding document has been criticised for its ambiguity and lack of commitments the North must adhere to in order to begin its denuclearisation process.