Kindergarten pupils walk by an exhibit dipicting South Korean soldiers during the Korean War at the Korea War Memorial Museum in Seoul, South Korea, Friday, June 7, 2013. North Korea on Friday proposed holding low-level government talks with South Korea this weekend as the rivals look to mend ties that have plunged during recent years amid hardline stances by both countries. A teacher explains to kindergarten pupils about a map illustrating battle campaigns in the Korean War at the Korea War Memorial Museum in Seoul, South Korea, Friday, June 7, 2013. South Korean army soldiers walk by a signboard showing the distance to the North Korean capital Pyongyang and to South's capital Seoul from Imjingang Station near the border village of the Panmunjom in Paju, South Korea, Friday, June 7, 2013. North Korea on Friday proposed working-level talks with South Korea to be held in a border city on Sunday as the rivals look to mend ties that have plunged during recent years amid hardline stances by both countries. (AP Photo/Ahn Young-joon) A South Korean military truck crosses Unification bridge, which leads to the demilitarized zone, near the border village of the Panmunjom in Paju, South Korea, Friday, June 7, 2013. A South Korean army soldier walks by a signboard showing the distance to the North Korean capital Pyongyang and to South's capital Seoul from Imjingang Station near the border village of the Panmunjom in Paju, South Korea, Friday, June 7, 2013. SEOUL, South Korea (AP) - The rival Koreas on Friday traded counterproposals over where to meet for talks Sunday, as mutual interest in mending abysmal ties clashed with mistrust stemming from years of animosity and hard-line stances. South Korea's suggestion that officials meet in a truce village straddling the heavily armed border between the countries came hours after Pyongyang said it favors holding talks in its border city of Kaesong. South Korea on Thursday had suggested high-level talks Wednesday in Seoul, but North Korea said Friday it wanted lower-level talks first because the countries' "relations have been stalemated for years and mistrust has reached the extremity." Two officials with Seoul's Unification Ministry, which deals with North Korea matters, said South Korea made the latest proposal through a cross-border Red Cross communications line newly reopened by the North. The South Korean officials spoke on condition of anonymity, citing office policy. Pyongyang didn't immediately respond to Seoul's most recent offer, but even the restoration the Red Cross line in the truce village of Panmunjom signals an easing of tensions. The line, used for exchanging messages on humanitarian and other issues, was shut down by the North in March during a weekslong period of animosity marked by North Korean threats of war and South Korean vows of counterstrikes. Friday's developments followed the countries' agreement a day earlier to hold talks on issues including reopening a jointly run industrial complex in Kaesong that had been the last symbol of inter-Korean cooperation before it closed this spring. The news was welcomed on both sides of the world's most heavily fortified border. Kwak Sok Gyong, a Pyongyang resident, told The Associated Press that the North's announcement "reflects what people want in both north and south. I think the relations between north and south should be improved as soon as possible. North Koreans interviewed by foreign media in Pyongyang often echo statements carried by the country's official state media. In Seoul, Park Gyeong-hyun, a 17-year-old student, said the Koreas have many unresolved problems, such as families separated by the Korean War six decades ago. So I view the talks as a positive thing because the relationship between the two Koreas will get better if the talks go well. Officials in Seoul said it wasn't yet clear what Sunday's proposed talks will focus on, if they happen. Such meetings in the past have involved lower-level officials charged with ironing out administrative details and reporting back to their bosses. The next step would be higher-level talks. The last government-level contact between the Koreas on their peninsula took place in February 2011 at Panmunjom, according to the South's Unification Ministry, which deals with North Korea issues. The mood on the Korean Peninsula has been tense since North Korean leader Kim Jong Il died in December 2011 and his son, Kim Jong Un, took over. Pyongyang, which is estimated to have a handful of crude nuclear devices, has committed a drumbeat of acts over the last year that Washington, Seoul and others deem provocative. The proposed talks could represent a change in North Korea's approach, analysts said, or could simply be an effort to ease international demands that it end its development of nuclear weapons, a topic crucial to Washington but not a part of envisioned inter-Korean meetings. Pyongyang understands that dialogue with Seoul is a precondition for any meaningful talks with the United States, and the North's latest overtures are aimed at creating a mood that could lead to U.S.-North Korea negotiations, said Yoo Ho-yeol, a North Korea expert at Korea University in South Korea. Because Pyongyang needs talks with Washington to win aid and security guarantees, "realistically, the North doesn't have a choice" in pursuing talks with Seoul. "Its relations with the United States can't improve while its relations with South Korea remain tense," Yoo said. U.S. State Department spokeswoman Jen Psaki said Thursday that Washington supports improved inter-Korean relations but cautioned that it doesn't signal progress on restarting talks on North Korea's nuclear program. For that to happen, North Korea has to abide by its previous commitments to abandon its nuclear weapons, she said. If the Koreas meet Sunday, the talks will come on the heels of a high-profile summit Friday by Chinese President Xi Jinping and U.S. President Barack Obama in which North Korea is expected to be a key topic. Xi is also scheduled to meet with South Korean President Park Geun-hye later this month. Beijing, which is Pyongyang's only major economic and political ally, has expressed growing frustration with its neighbor, tightening inspections on cross-border trade and halting business with North Korea's Foreign Trade Bank. But Beijing, worried about its own economy and a possible influx of refugees, also views stability in Pyongyang as crucial. The proposals for dialogue by the Koreas follow a meeting late last month in Beijing by Xi and the North Korean military's top political officer, who reportedly expressed a willingness to "launch dialogue with all relevant parties."