SEOUL - North Korea reopened a hotline with South Korea on Friday as the two sides agreed to weekend talks aimed at mending ties after months of soaring tensions and threats of nuclear war.

The two Koreas unexpectedly reached a snap agreement Thursday on opening a dialogue, with South Korea responding to a North initiative by offering a  ministerial-level meeting in Seoul on June 12.

A spokesman for Pyongyang's Committee for the Peaceful Reunification of Korea (CPRK) then suggested initial lower-level talks Sunday in the Kaesong joint  industrial zone. The South's Unification Ministry -- using the newly reopened hotline -- agreed but said the border truce village of Panmunjom would be a more appropriate  venue.

The North shut down Kaesong, which lies just over its side of the border, in April as military tensions on the divided peninsula peaked. Reopening the joint  complex will top the agenda for the proposed dialogue. "Working-level contact... is necessary prior to ministerial-level talks proposed by the South, in light of the prevailing situation in which bilateral  relations have stalemated for years and mistrust has reached an extreme," the CPRK spokesman said. The restoration of the Red Cross hotline, which Pyongyang had cut in March, marked a tangible step in the effort to dial down tensions.

The telephone link that runs through Panmunjom has long been a vital source of government-to-government communication in the absence of diplomatic relations.

The last working-level talks between the two countries were held in February 2011, and there have been no inter-Korean talks at the ministerial level since  2007.

The agreement on resuming a dialogue, came just ahead of Friday's US-China summit, at which the North's nuclear programme will be high on the agenda.

The North's nuclear test in February resulted in tightened UN sanctions and triggered the cycle of escalating tensions that saw Pyongyang threaten  pre-emptive nuclear strikes against the United States and South Korea.

China, the North's sole major ally and economic benefactor, has been under pressure from the United States to restrain its neighbour, and both Washington and  Beijing welcomed the tentative talks agreement.

Yoo Ho-Yeol, a North Korea expert at Korea University in Seoul, said North Korea's surprise shift signalled a desire to initiate a wider dialogue in the

future that "would eventually include the United States".

But US State Department spokeswoman Jennifer Psaki made it clear that North Korea would have to show some commitment towards abandoning its nuclear weapons

programme before the US got involved.

"There remain a number of steps that the North Koreans need to take, including abiding by their international obligations... in order to have further

discussion," Psaki told reporters.

Pyongyang has repeatedly insisted that its nuclear deterrent is not up for negotiation.

The proposed agenda for the North-South talks involves the re-opening of Kaesong, the resumption of tours to the North's Mount Kumgang resort and renewed

cross-border family reunions.

The Kaesong complex, established in 2004 as a symbol of inter-Korean cooperation, was the most high-profile casualty of the recent tensions.

Operations ground to a halt after the North pulled all its 53,000 workers out in early April. The South withdrew its managers and officials soon afterwards.

Ok Sung-Seok, vice president of the association representing the 123 South Korean firms established in Kaesong, welcomed the move away from confrontation

towards dialogue.

"We've been living in despair over the past 60 days," Ok told reporters. "The most important thing is how to secure a guarantee that such a disruption will

not occur in the future."

South Korean President Park Geun-Hye had called weeks ago for talks on Kaesong, but the North had rejected the offer.

Park, who took office in February just days after the North's nuclear test, has pushed a "trust-building" policy with Pyongyang.

In a meeting with top military commanders on Friday, Park said it was South Korea's "firm security posture" during the recent crisis that had prompted the

North's talks proposal.