South Korea has offered high-level talks with rival North Korea to find ways to co-operate on next month’s Winter Olympics in the South.

Seoul’s quick proposal after a rare rapprochement overture from Pyongyang a day earlier offers the possibility of better ties after a year which saw a nuclear stand-off increase fear of war on the Korean Peninsula.

In a New Year address, North Korean leader Kim Jong-un said on Monday he is willing to send a delegation to the Olympics, though he also repeated nuclear threats against the US.

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Kim said the US should be aware that his country’s nuclear forces are now a reality, not a threat. He said he has a “nuclear button” on his office desk and much of the US was within range.

Analysts said Kim may be trying to drive a wedge between Seoul and its ally, Washington, as a way to ease international isolation and sanctions against North Korea.

Kim’s overture was welcome news for the South Korean government led by liberal President Moon Jae-in, who favours dialogue to ease the North’s nuclear threats and wants to use the Olympics as a chance to improve inter-Korean ties.

Moon’s unification minister, Cho Myoung-gyon, proposed that the two Koreas meet next week in the shared border village of Panmunjom to discuss Olympic co-operation and how to improve overall ties.

Yesterday, Moon spoke of Kim’s positive response to earlier South Korean dialogue overtures and ordered officials to study how to restore talks with North Korea and get the North to participate in the Olympics.

North Korea did not immediately respond. But if there are talks, they would be the first formal dialogue between the Koreas since 2015.

Relations between the Koreas have plunged as North Korea under Kim expanded its weapons programmes.

Last year, North Korea carried out its sixth and most powerful nuclear test and test-launched three intercontinental ballistic missiles as part of its push to possess a nuclear missile capable of reaching anywhere in the US.

The North was subsequently hit with toughened UN sanctions, and Kim and US President Donald Trump exchanged warlike rhetoric and crude personal insults against each other.

Possible inter-Korean talks could provide a temporary thaw in strained inter-Korean ties, but could also weaken US-led international pressure on the North.

After the Olympics, inter-Korean ties could become frosty again because North Korea has made it clear that it has no intention of accepting international calls for nuclear disarmament and instead wants to bolster its weapons arsenal.