One of South Korea's most prominent businessmen, the chairman of the Hyundai group, Chung Ju-yung, has held a rare meeting with the North Korean leader, Kim Jong-il.

Mr Chung, who described Mr Kim as a respectful young man, said the reclusive leader had agreed to further business exchanges and co-operation in the oil industry.

Mr Chung arrived in Pyongyang on Tuesday to deliver five-hundred cattle to the North, which is suffering severe food shortages.

Mr Chung's visit was also intended to develop businesses and tourist initiatives that Hyundai are trying to establish in the North.

A spokesman for the South Korean president, Kim Dae-jung, said the meeting between the two men was very significant.

A BBC Correspondent says the government in Seoul will regard the meeting as step forward for its policy of engagement with the North.