The aim is to cement a permanent peace deal to replace the armistice, which ended the fighting, but left the two sides still technically at war.

It is the third round of discussions - the last talks broke down in March, after North Korea demanded the withdrawal of nearly 40,000 US troops from the peninsula.

In spite of its poverty, Norh Korea has a formidable military

North Korean negotiators said a peace treaty must be agreed only between Pyongyang and Washington, the signatories of the 1953 armistice.

The meeting is the first since Kim Jong-Il's formal assumption of power in Pyongyang, and South Korean and US representatives are keen to see if there are any signs of change in North Korea.

Last week North Korea last week said it wanted to see "fruitful" results from the Geneva talks but added "issues of withdrawing the US troops from South Korea and signing a peace agreement between the DPRK [North Korea] and the United States" should be discussed as the main items on the agenda.

Open agenda

North Korean Deputy Foreign Minister Kim Gye Gwan wants "fruitful" talks

Diplomats say the prospects for any progress are slight, but it is understood the agenda is being kept open, to allow both sides to bring up any issue they like.

"It is still too early to say if we can expect success," said a South Korean official based in Geneva. But, he said, "the fact that we are continuing a dialogue is a good thing."

After late night bilateral discussions, between South Korea and China, the foreign ministry in Beijing gave an optimistic assessment, about the prospects for the talks.

"The Chinese side has always maintained the establishment of a new peace mechanism in place of the old attitude is feasible," said foreign ministry spokesman Tang Guoqiang.