By Dan Griffiths
BBC News, Seoul
They share the same language and culture, and of course the same border - but relations between North and South Korea have never been that neighbourly.
The last summit reduced tension between the two Koreas
The two countries are still technically at war - they never signed a peace treaty after the conflict on the Korean Peninsula in the 1950s.
So summits like this one do not happen very often.
That explains Seoul's upbeat reaction to this announcement.
"The second inter-Korean summit will contribute to substantially opening the era of peace and prosperity between the two Koreas," the South Korean presidential office said in a statement.
It has been seven years since the leaders of North and South Korea last met.
That was in 2000 when then South Korean President Kim Dae-jung met his counterpart, Kim Jong-il, in the North Korean capital Pyongyang.
That meeting led to reduced tension on the Korean Peninsula and boosted economic co-operation.
THE TWO KOREAS
1910: Korean Peninsula colonised by Japan
1945: Divided into US-backed South and Soviet-backed North
1950-1953: Korean War, no peace deal signed
1987: North Korea bombs a South airliner, killing 115
1990s: South Korea introduces conciliatory Sunshine Policy
2000: Kim Jong-il and Kim Dae-jung hold first leaders' summit
Kim Dae-jung won a Nobel prize for his work, but that was later marred by allegations that South Korea had made secret payments to the North in return for talks.
Kim Dae-jung's successor, President Roh Moo-hyun, is unlikely to make such a direct offer this time, according to Aidan Foster-Carter, an honorary senior research fellow in sociology and modern Korea at Leeds University in the UK.
But he will still be under pressure to bring some substantial commitments back from Pyongyang, Mr Foster-Carter adds.
Mr Roh's government has continued to push a so-called Sunshine Policy of engagement - which has involved giving large amounts of aid and incentives to its impoverished northern neighbour - despite increasing public opposition at home.
This is his chance to prove his critics wrong.
South Korean sources say Kim Jong-il believed the timing was right for a second summit given the improved regional situation.
That was a reference to newfound optimism on the Korean Peninsula after Pyongyang promised to abandon its nuclear ambitions in return for aid and security guarantees, at six-party talks earlier this year.
Since then North Korea has shut down its main nuclear reactor in exchange for shipments of oil.
But this summit is unlikely to see any major breakthroughs on the nuclear issue.
The two Koreas may discuss the resumption of train links
The main players in the six-party talks are the US, North Korea and China - Pyongyang's closest ally.
South Korea, Japan and Russia are also involved, but they do not have the same influence.
In fact the South will be hoping this summit will help it regain some of the influence it has lost in the six-party process, Mr Foster-Carter says.
"South Korea really needed to do something to get North Korea's attention at the same level that the US and China has," he says.
Even if there is little progress on achieving a nuclear-free North at this summit, there are still many issues the two Koreas have yet to resolve - one of the most central of which is the possibility of normalising inter-Korean ties, finally bringing an official end to the Korean War.
There could also be discussions on further aid from the South to the impoverished North, as well as improved trade links and an increase in joint economic projects.
The two sides are also likely to look at disputed sea borders, and progress on a long-discussed regular train link between the North and South: the first, largely symbolic train trip across the border took place in May.
Finally there is the possibility of more family reunions between relatives separated when the North and South were divided after the war.
South Korea benefits
Whatever the topic of discussion at the summit, it is still a big boost for Mr Roh.
He is coming to the end of an unpopular term in office.
A successful summit would help bolster his standing and improve the fortunes of the governing Uri party candidate in the presidential elections in December.
The conservative opposition party, the Grand National Party (GNP), has already criticised the timing of the meeting, calling it an election ploy ahead of the presidential vote.
The GNP, currently well ahead in the opinion polls, has taken a tougher line on North Korea in the past than the Uri party, and there has been some speculation that Kim Jong-il agreed to the summit, knowing it might boost the fortunes of the underdog.
President Roh has often said he would meet Mr Kim at any time and any place.
Finally, he has the summit he has been pushing for throughout his presidency.
Now the big challenge is to turn this political windfall into real results.