SEOUL -- North Korea is ready to resume talks with the United States, South Korea announced Saturday in unveiling an agreement to revive peace efforts with the unpredictable Stalinist state.

On his return to Seoul from three days of talks in Pyongyang, South Korean presidential envoy Lim Dong-won said North Korean leader Kim Jong-il was once again ready to engage the outside world.

"Chairman Kim Jong-il has accepted the request from (South Korean) President Kim Dae-jung that the North should reopen dialogue with the United States," Lim told a press conference.

He quoted Kim Jong-il as saying that Pyongyang would welcome a planned visit by Jack Prichard, the U.S. special envoy for negotiations with North Korea, AFP reported.

"Chairman Kim also expressed a wish to resume talks with Japan, saying that red cross talks with Japan will resume at an early date," the envoy said.

North Korea broke off contacts after U.S. President George W. Bush came to office adopting a tougher line on the famine-stricken nation's suspected drive to build nuclear missiles.

Bush in January labelled Pyongyang part of an "axis of evil", together with Iraq and Iran, which he accused of spreading weapons of mass destruction.

Suspicion over the North's nuclear program mounted last month when Washington said it could not certify that North Korea was sticking to a 1994 nuclear accord.

North Korea has lashed out angrily and in recent weeks had stepped up an verbal onslaught against both the United States and its prosperous capitalist neighbor.

Pyongyang, however, said it was now ready to resume peace talks with Seoul which would cover economic contacts and reunions of families split by the peninsula's division in 1945 and the 1950-53 Korean war.

"Both sides agreed to bring back on track the inter-Korean relations that had temporarily been frozen," they said in a joint statement carried by the North's official Korean Central News Agency.

"Both sides agreed to respect each other and strive not to create tension, guided by the basic spirit of the historic June 15 North-South joint declaration."

The two leaders signed the declaration at a historic summit in Pyongyang on June 15, 2000, raising hopes of an end to decades of cold war confrontation before tensions escalated once again in recent months.