By Charles Scanlon
South Korea says it has offered new incentives for North Korea to return to six-party talks on its nuclear weapons programme.
North Korea's nuclear plans are stoking concern
It has also warned Pyongyang not to continue developing such weapons.
The two sides are meeting for high-level discussions at Kaesong, just north of the border, for their first talks for 10 months.
North Korea has requested large amounts of fertiliser from the South, to help alleviate chronic food shortages.
The South Korean government is alarmed by signs the North is pushing ahead with its nuclear weapons programme.
It sees the two days of meeting in Kaesong as an opportunity to entice it back to stalled international talks.
The South's chief negotiator said he had promised a new and serious proposal if North Korea returned to the negotiating table.
He did not elaborate, but said it would go beyond the economic aid and security guarantees offered at the last session in Beijing 11 months ago.
The North has since declared itself a nuclear weapons state, and says it has extracted nuclear fuel to make more bombs.
South Korean officials say they believe the North is ratcheting up tension to extract a better deal.
The North called for the inter-Korean meeting at the weekend.
With the planting season underway, it is thought to be desperate for fertiliser for its crops.
South Korea is expected to oblige with a donation of rice, and at least 200,000 tonnes of fertiliser.
Seoul strongly opposes sanctions, and believes a diplomatic solution is still possible.