(ATTN: CHANGES headline, lead; UPDATES with details in paras 2-5)
SEOUL, Jan. 6 (Yonhap) -- South and North Korea will continue their discussions for a second day on Sunday to arrange the details of high-level talks next week over the North's potential participation in the PyeongChang Winter Olympics, officials here said Saturday.
The two Koreas agreed Friday to hold their first official dialogue in more than two years next Tuesday at the border truce village of Panmunjom.
"At around 9:30 a.m., our side and North Korea began hotline communications and held consultations over the composition of delegations via exchanges of documents," said an official at the Ministry of Unification.
Seoul proposed sending a five-member delegation led by Unification Minister Cho Myoung-gyon, while the North has yet to respond.
"The two sides wrapped up today's discussions at 5:45 p.m. and will continue talks on Sunday," he said.
Cho, 61, is a veteran negotiator with extensive experience in inter-Korean dialogue. He played a key role in preparing for the South-North summit held in 2007.
The Seoul delegation will include two deputy ministers each from the Unification Ministry and the Ministry of Culture, Sports and Tourism, according to the official.
It is likely that the North's delegation will be led by Ri Son-gwon, chairman of the Committee for the Peaceful Reunification of the Country, North Korea's state agency in charge of inter-Korean affairs.
Ri announced Wednesday that the North's leader ordered the reopening of the hotline, vowing that North Korea will agree to participate in inter-Korean talks.
North Korea’s potential inclusion in next month's Winter Olympics is closely being watched, as its participation would be seen as a peaceful gesture to help ease tensions on the Peninsula. South Korea and the U.S. agreed to postpone their joint military exercises scheduled to take place during the games.
Meanwhile, South Korea's presidential office said President Moon Jae-in was briefed on the preparations for the upcoming inter-Korean talks earlier in the day.
"Inter-Korean talks are the starting point for the settlement of peace on the Korean Peninsula and North Korean nuclear and missile problems. Against such a backdrop, President Moon has been receiving a detailed briefing on the current situation," said a Cheong Wa Dae official.
In his New Year's speech, North Korean leader Kim Jong-un sent a rare conciliatory message that he is willing to dispatch a delegation to the Feb. 9-25 Winter Olympics hosted by the South.
"The main agenda items will include how to improve inter-Korean relations, including (the North's participation in) the games," Baik Tae-hyun, a Unification Ministry spokesman, told a press briefing Friday.
The government of liberal President Moon Jae-in has expressed hopes that the North's participation will ease tensions on the peninsula, which have flared up due to North Korea's nuclear and missile provocations.
Moon also hopes that better inter-Korean relations will pave the way for the resolution of the North Korean nuclear issue and for broader talks between the U.S. and the North.
Cheong Wa Dae said that the two sides may discuss ways to improve relations, but only after they finalize the Olympics issue.
Possible agenda items with regard to the Olympics include whether the North's delegation would travel by land and whether the two Koreas would march together under a unified Korean flag at the opening and closing ceremonies.
If they travel by land, there needs to be consultation between the military authorities of each side.
If the North sends a cheering squad or a performing arts and singing team, the two sides must consult over details such as travel route, accommodation and security.
The cost of accommodation and other expenses may be addressed in the discussions.
The International Olympics Committee (IOC) said that it is willing to cover the costs of the North's athletes if Pyongyang takes part in the games.
Seoul covered similar costs in the past using inter-Korean cooperative funds when North Korean athletes took part in international sporting events held in South Korea.
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