The two leaders reached agreement on a number of issues

South Korean President Roh Moo-hyun and the North's Kim Jong-il issued the declaration after a three-day historic summit in Pyongyang.

They called for international talks on a treaty to replace the armistice that ended the 1950-53 Korean War.

The agreement came a day after the North agreed to end its nuclear plans.

Officials involved in separate, international talks aimed at ending North Korea's nuclear programme confirmed that Pyongyang had committed to a timetable to disable its nuclear facilities.

'Permanent peace'

Mr Roh and Mr Kim shook hands and drank a toast after they signed the eight-point declaration.

South Korean media reported that I have diabetes and even heart disease, but the fact is that is not the case at all

Kim Jong-il

Health rumours denied Q&A: Nuclear stand-off Korean media reaction

The agreement stated: "The South and North share the view that they should end the current armistice system and build up a permanent peace system."

It called for leaders of nations concerned to meet on the Korean Peninsula and agree an end to the 1950-1953 war.

Any such talks would probably involve the US and China which, along with North Korea, signed the armistice that ended the war.

South Korea did not sign and remains technically at war with the North.

The two sides also agreed to resume freight rail services across the heavily fortified border for the first time in more than five decades.

And the North Korean leader used the occasion to quash speculation that he was suffering from ill health.

THE TWO KOREAS 1910: Korean Peninsula colonised by Japan 1945: Divided into US-backed South and Soviet-backed North 1950-1953: Korean War, no peace deal signed 1987: North Korea bombs a South airliner, killing 115 1990s: South Korea introduces conciliatory Sunshine Policy 2000: Kim Jong-il and Kim Dae-jung hold first leaders' summit 2007: Kim Jong-il and Roh Moo-hyun hold second leaders' summit

In pictures: Summit end Outline of joint declaration History of the Korean War

"South Korean media reported that I have diabetes and even heart disease, but the fact is that is not the case at all," Mr Kim told delegates at the farewell luncheon.

Agreements were also reached on establishing a joint fishing zone in the disputed western sea border and on holding regular summits, although no timetable was given for these.

More reunions between families divided by the partitioning of the Korean Peninsula would be held, the declaration said.

The summit is only the second between leaders of the two nations.

The BBC's John Sudworth in Seoul says that, while there is a sense that history is being made, the detail of the declaration will be important.

A similar optimism surrounded the first summit seven years ago, attended by former South Korean leader Kim Dae-jung, but many people feel very little has really changed, our correspondent adds.

Nuclear deal

On Wednesday, officials involved in six-party talks on the North's nuclear ambitions revealed that Pyongyang had formally committed to disabling its Yongbyon reactor and related sites, and fully disclosing all aspects of its nuclear programme by the end of the year.

Yongbyon, the North's main reactor, was closed earlier this year in return for aid, as part of the first phase of the deal.

A US-led team of experts is to go to North Korea in the next two weeks to begin the process.

The final crucial phase of the deal - where North Korea surrenders its existing nuclear stockpile - is due to be implemented next year.

US President George W Bush has welcomed the agreement, but Japan - one of the six countries involved in the talks - remained cautious.

On Thursday its ruling party backed extending sanctions against North Korea, citing a lack of progress in a row over Japanese nationals abducted by Pyongyang.

North Korea carried out its first nuclear test in October 2006.