By Hyonhee Shin
SEOUL (Reuters) - North and South Korea agreed on Monday to begin reconnecting rail and road links, another step in an improving relationship that has raised U.S. concern about the possible undermining of its bid to press the North to give up its nuclear programme.
The agreement on transport links came during talks in the border village of Panmunjom aimed at following up on the third summit this year between South Korea's President Moon Jae-in and North Korean leader Kim Jong Un, last month.
"The South and North reached the agreement after sincerely discussing action plans to develop inter-Korean relations to a new, higher stage," said a joint statement released by the South's Unification Ministry.
They agreed to hold ceremonies in late November or early December to inaugurate work on reconnecting the railways and roads that have been cut since the 1950-53 Korean War.
The two sides will carry out joint field studies on the transport plans from late this month, according to the statement.
They also agreed to discuss late this month a plan to pursue a bid to co-host the 2032 Olympic Games, and to explore in November ways to restart webcam reunions and video exchanges for families separated by the Korean War.
Military officials from both sides are to meet "in the near future" to craft follow-on steps to a military pact struck at last month's summit.
The accord includes the reinstatement of a joint military commission, the halting of military exercises, a no-fly zone near their border and the gradual removal of landmines and guard posts within the Demilitarised Zone (DMZ).
Meetings will also be held on reforestation on Oct. 22, and on health and disease prevention in late October at a joint liaison office opened last month in the North's border city of Kaesong.
The talks were led by the South's Unification Minister Cho Myoung-gyon and Ri Son Gwon, chairman of the North's committee for peaceful reunification that handles cross-border affairs.
"We are at a very critical moment for the denuclearisation of the Korean peninsula and the advancement of inter-Korean relations, and there's also a second North Korea-U.S. summit coming up," Cho told reporters before leaving for Panmunjom.
In June Kim met U.S. President Donald Trump in an unprecedented summit in Singapore and the two sides are arranging a second meeting, which Trump said was likely after U.S. congressional elections on Nov. 6.
Despite the meeting between Kim and Trump, Washington is still pursuing a policy of "maximum pressure" to get North Korea to give up its nuclear weapon and ballistic missiles that Pyongyang says can hit the continental United States.
'PROBLEMS SHOULD BE FIXED'
The thaw in ties between the neighbours has sparked U.S. concerns that it may be outpacing negotiations to dismantle the North's nuclear and missile programmes.
In August, a joint inspection plan for the rail project was scrapped after the United Nations Command (UNC), which overlaps with U.S. forces in the South and oversees affairs in the DMZ, refused passage for a test train, military sources said.
U.S. Secretary of State Mike Pompeo expressed "discontent" over the inter-Korean military agreement, South Korea's foreign minister Kang Kyung-wha said last week.
Kang's remarks amounted to a rare confirmation of discord between Seoul and Washington, though the allies have said they remain in lockstep on North Korea.
In final remarks on Monday, the North struck a sour note, with Ri blaming Seoul for hurdles in implementing their pacts.
"If we look back at the projects we have been carrying out so far, there are problems that should be fixed, and the South side knows better," Ri said, without elaborating.
Asked later about the remarks, Cho said there was no "special background" but attributed delays in the rail and road initiative and other cultural exchanges to "each other's circumstances".
The rail and road initiative and the joint Olympics bid were agreed by Moon and Kim at their latest summit, in the North Korean capital, Pyongyang.
Moon also said the North would permanently abolish key missile facilities in the presence of foreign experts.
Trump said on Wednesday South Korea would not lift sanctions on North Korea without U.S. approval.
(Reporting by Hyonhee Shin and Joint Press Corps; Editing by Robert Birsel and Clarence Fernandez)