North and South Korea agreed on Friday to hold their first talks in more than two years, hours after Seoul and Washington decided to defer joint military exercises which always infuriate Pyongyang until after the Winter Olympics, reports AFP from Seoul.The meeting, the first since December 2015, will take place in Panmunjom, the truce village in the heavily fortified Demilitarized Zone that divides the peninsula. South Korean President Moon Jae-In said that "overly optimistic expectations" were "undesirable" but added: "We will do our best to make the Pyeongchang Olympics an Olympics for peace and settle the nuclear issue peacefully." Tensions have been high after the North carried out multiple missile launches in 2017, including a number of ICBMs, and its sixth atomic test, by far its most powerful to date.

The tentative rapprochement comes after the North's leader Kim Jong-Un warned in his New Year speech that he had a nuclear button on his desk, but at the same time offered Seoul an olive branch, saying Pyongyang could send a team to next month's Games in the South. Seoul responded with an offer of talks and earlier this week the hotline between them was restored after being suspended for almost two years. Late Thursday, Moon and his US counterpart Donald Trump agreed to delay the giant Foal Eagle and Key Resolve joint military drills until after the Winter Olympics, which begin in Pyeongchang on February 9. That announcement came hours after Trump said high-level talks between North and South would be "a good thing" -- although the US has long insisted that it will not negotiate with Pyongyang unless it first takes concrete steps towards disarmament.