By Charles Scanlon
BBC correspondent in Seoul
North and South Korea have reached an agreement in principle on reducing military tension.
Compromises were made on both sides
The joint statement followed overnight talks between senior officers.
A session of talks last week was the first direct meeting between general-level officers from the two Koreas since the Korean war.
A North Korean general led a military delegation through the heavily-fortified border to meet South Korean officers who were led by an admiral.
After 20 hours of meetings, the two sides said they had an agreement in principle.
South Korea has been pushing for measures to avoid a repetition of naval clashes that have claimed casualties on both sides in recent years.
The North finally agreed to set up a telephone hotline between the rival navies, share radio frequencies and agree on visual signals.
North Korea had been insisting that the underlying problems be addressed first - the disputed maritime border off the west coast.
Ships from the two sides have fought fierce gun battles at this time of year as the lucrative crab fishing season gets under way.
Known as Northern Limit Line
Position declared by UN in 1953
Not recognised by North
Regularly breached by North's fishermen
In return, the south agreed to end propaganda broadcasts across the military buffer zone that divides their armies, and to dismantle electronic signboards that send messages to enemy troops.
Further talks will be held to work out details.
The agreement will be seen as a breakthrough by the South Korean government which is pursuing a policy of reconciliation with the north.
Until now, North Korea has refused to discuss highly sensitive security issues, preferring to concentrate on improving economic relations.