North and South Korea have agreed to hold economic talks and briefly reunite families but have failed to bridge the biggest gap - when to hold military talks to help build a railway across the world's most fortified border.
The United States and Japan, preparing for their own talks with Pyongyang soon, will closely scrutinise the outcome of the three-day talks at a secluded hotel in central Seoul for clues about Pyongyang's latest diplomatic outreach and tactics.
In a statement released after high-level talks and lower-level haggling, the two Koreas said they would arrange temporary reunions next month for families split for half a century and hold economic talks from August 26th to 29th in Seoul.
"The two Koreas agreed to hold military talks as soon as possible and also agreed that each side needs to secure military steps shortly to help build railways and roads between the two Koreas," the statement said.
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South Korea had been looking for a fixed date for the military talks - vital for a highly symbolic building project in one of the world's most dangerous border zones - rather than a promise to sit down some time.
South Korean delegation member Rhee Bong-jo later told reporters the two sides would decide the exact date for the military talks at the economic discussions later this month.
"We're not 100 per cent satisfied with the outcome," South Korean Deputy Foreign Minister Lee Tae-sik told reporters when asked why they failed to specify a date for military talks.