SEOUL - The rival Koreas reached a deal on Friday to resume from September reunions of families torn apart by the 1950-53 Korean War, as the isolated North reaches out to its foes after being hit by U.N. sanctions.

In another gesture that could defrost frigid ties, North Korea will release on Saturday four South Korean fisherman it has held after their boat drifted into the North's waters several weeks ago, a Unification Ministry official said.

The North contacted officials in the South to say it would release the fishermen and their boat at sea in a move that eases another area of tension between the two states technically still at war.

Analysts said the conciliatory moves made by the North this month may be aimed at bolstering its coffers after U.N. sanctions imposed for its nuclear test in May made it more difficult to trade arms, cutting into a key source of cash that estimates say could be worth about 6 percent of its $17 billion a year economy.

The North Koreans are using strategic tactics to get around the problems caused by its nuclear program, said Yang Moo-jin, a professor at the South's University of North Korean Studies.

Last week, North Korea sent envoys to the United States, its long-time adversary, to discuss resuming non-governmental food aid to the impoverished communist state that battles chronic shortages, the South's Yonhap news agency reported.


The Koreas agreed to resume the reunions from September 26 to October 1 for about 100 families from both sides of the border.

They will be held at the Mount Kumgang resort in North Korea, which is run by an affiliate of the South's Hyundai Group, the South's Unification Ministry said in a statement.

North and South Korea will continue to discuss humanitarian issues, including separated families, under the ideal of developing inter-Korean relations, it said.

The highly emotional meetings of families who left siblings, parents and relatives on the other side of the divided peninsula when the Korean War ended with a ceasefire began about nine years ago.

The South has also been pressing the North to account for more than 1,000 of its citizens who were either abducted by the communist state or were prisoners-of-war who were not allowed to return after the fighting ended.

North Korea suspended the reunions in anger at the policies of the South's President Lee Myung-bak, who took office about 18 months ago. Lee cut off unconditional aid and told Pyongyang that funds would only resume when it ended its nuclear arms program.

The North this month ended its boycott of the Lee government by sending a delegation to the South for its first contact since he took office, while its official media has suspended the torrent of insults that had been directed at Lee for months.

North Korea also released two U.S. journalists it had held since March when former U.S. President Bill Clinton visited Pyongyang in August and met leader Kim Jong-il.

South Korean media reports this week said during the Clinton trip the North had requested that the U.S. envoy for North Korea, Stephen Bosworth, visit Pyongyang in September.
But Bosworth will not visit North Korea if he goes to Asia soon, nor does he have plans to meet North Korean officials elsewhere in the region, the U.S. State Department said on Thursday.

Philip Goldberg, Washington's point man for the U.N. sanctions on the North, has been in Asia in recent days trying to build support for the measures.

Investors in Seoul said the softer tone from Pyongyang has not had a major impact on trading, but it has eased concerns about an escalation of troubles leading to a conflict that would threaten the globally important economies of the region.

(Additional reporting by Christine Kim, Rhee So-eui and Seo Eun-kyung; Editing by Jeremy Laurence)