Moscow, Jun 9 (IANS/RIA Novosti): North and South Korea have agreed that talks slated for Sunday should be held in the demilitarised zone between the two countries.

The talks are to be held in Panmunjom, an abandoned village in the demilitarised zone, where the armistice or cease-fire was signed in 1953 ending the Korean War, Yonhap new agency reported.

On Thursday, the two countries agreed to talks "in principle" about joint projects, and the following day announced their firm commitment to meeting Sunday: only the location remained to be decided.

One of the key issues to be discussed is re-starting operations in the Kaesong Industrial Complex, home to 123 South Korean factories employing about 53,000 workers.

Work stopped there in April when North Korea withdrew all its workers as tension in the region escalated sharply, following additional UN sanctions imposed after North Korea carried out its third nuclear test in seven years in February.

The initiative is timed to mark "the anniversary of the June 15 joint declaration," North Korean state news agency KCNA cited the country’s reunification committee, responsible for relations with South Korea, as saying in a statement.

The joint declaration referred to was signed in 2000 following a bilateral summit, and ushered in a period of improved relations between the two states which technically remain "at war" as only an armistice, not a formal peace treaty, was signed at the end of the Korean War in 1953.