South Korea said Sunday it will accept a North Korean proposal - and major policy change - to reopen talks on economic aid and other issues.

North Korea proposed Saturday that officials at the deputy minister level meet in Beijing this weekend.The talks, if held, would be the first South-North Korea government contact since 1994, when deputy prime ministers of the two sides met to prepare for the first summit between the two Koreas.

The proposed summit was canceled after North Korean leader Kim Il Sung died a few weeks before it was to be held.

"South and North Korea will have governmental talks for the first time in years," said South Korean President Kim Dae-jung.

"It is a very significant change and progress. We'll not only accept the proposal but also put our efforts to achieve successful results," Kim told reporters at Seoul's airport after returning from an Asia-Europe summit in London.

Relations between the two Koreas had been frozen because of North Korea's refusal to talk with South Korea's previous government, which it called "anti-national, anti-unification."

North Korea's proposal came after Pyongyang unofficially appealed for 200,000 tons of fertilizer from South Korea through a South Korean agricultural expert who visited the North late last year.

South Korean officials have said they would consider the appeal if official government talks are held.

North Korea suggested that the talks take place at a Beijing hotel to discuss the fertilizer aid and "other matters of mutual concern."

South Korean news media, quoting unidentified sources, reported Sunday that Seoul would accept the proposal on the condition that the meeting be held on the Korean peninsula.

South Korea prefers the border village of Panmunjom as a meeting site, a suggestion already rejected by North Korea for a recent series of Red Cross talks for food aid.

All recent Red Cross contacts between the two Koreas have been held in Beijing. In the latest meeting in March, South Korea agreed to give 50,000 tons of food to famine-stricken North Korea.

Chronic mismanagement of agriculture plus floods and drought have caused severe food shortages in North Korea. In January, the World Food Program appealed for 650,000 tons of emergency food aid.

South Korean officials are insisting that if a meeting is held, the agenda should include humanitarian issues such as reuniting families.

An estimated 10 million Koreans remain separated by the division of the Korean peninsula into the communist North and the capitalist South in 1945 and the 1950-53 Korean War.

About 50 people from each country were allowed to cross the border in 1985 for temporary reunions - the first and only time such reunions have been allowed since the division of the peninsula.